IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC FRIDAY, THE 20TH FEBRUARY 2009 / 1ST PHALGUNA 1930 WP(C).No. 3681 of 2009(L) ------------------------- PETITIONER(S): --------------- M/S. SOLVAR WIRES PVT. LTD., (FORMERLY M/S. SOUTHERN ELECTROMAG PVT. LTD.), CHEMICAL INDUSTRIAL ESTATE, AROOR-688 534, REPRESENTED BY ITS DIRECTOR SRI.JIMMY JOSE. BY ADV. SRI.ASWIN GOPAKUMAR SRI.PRAVEEN.H. SRI.ANWIN GOPAKUMAR RESPONDENT(S): --------------- 1. UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY OF COMMERCE & INDUSTRY, UDYOG BHAVAN, NEW DELHI-110 011. 2. THE DEVELOPMENT COMMISSIONER, COCHIN SPECIAL ECONOMIC ZONE, KAKKANAD, COCHIN-682 037. 3. THE DEPUTY COMMISSIONER OF CUSTOMS, COCHIN SPECIAL ECONOMIC ZONE, KAKKANAD, COCHIN-682 037. 4. M/S. STABLE MAGNET WIRES PVT. LTD., PLOT NO.4, COCHIN SPECIAL ECONOMIC ZONE, KAKKANAD, COCHIN-682 037. ADV. SRI.JOSEPH KODIANTHARA FOR R4 SRI.MATHEWS K.UTHUPPACHAN FOR R4 SRI.TERRY V.JAMES FOR R4 SRI.P.PARAMESWARAN NAIR, ASC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20/02/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ANTONY DOMINIC, J. ------------------------- W.P.(C.) No.3681 of 2009 --------------------------------- Dated, this the 20th day of February, 2009 J U D G M E N T Prayer sought in this writ petition is to direct respondents 2 & 3 to take necessary action on Exts.P1 & P2 representations made by the petitioner. There is a further prayer to direct the aforesaid respondents to permit clearances by the 4th respondent to Domestic Tariff Area only on payment of full duties of customs and other applicable taxes and rates. 2. The petitioner set up a unit within the Cochin Special Economic Zone in the year 2002. It would appear that the Management of the Unit was taken over and is presently run by the 4th respondent. Although, there is a controversy as to whether the petitioner can continue manufacturing of certain products manufactured by the 4th respondent, I am not concerned with that issue in this writ petition. 3. The petitioner submits that in his Unit he is continuing the manufacturing of enamelled copper wire, the major component of which is said to be copper. It is stated that the 4th respondent, WP(C) No.3681/2009 -2- who is also manufacturing the same product, is misusing the benefits, that are available to the units situated in Special Economic Zone, and is clearing the goods into Domestic Tariff Area without payment of the appropriate rate of customs duties. It is stated that as a result of this, the 4th respondent is targeting the petitioner's customers and is under-quoting the price. It is stated that such under-quoting of price is possible only because the 4th respondent is evading duties payable by them. According to the petitioner, this issue was brought to the notice of respondents 2 & 3 by filing Exts.P1 & P2 complaints. It is stated in the writ petition that although considerable customs duty is avoided by the 4th respondent, neither respondents 2 & 3 are taking cognizance of the same, nor they are taking action on Exts.P1 & P2. The main contention raised by the learned counsel for the petitioner is relying on Section 30 of the Special Economic Zones Act, 2005, and the Rules framed thereunder. It is argued that the 4th respondent is not eligible for any duty concessions. 4. Respondents 3 & 4 have filed counter affidavits. 5. From the counter affidavit filed by the 3rd respondent, it WP(C) No.3681/2009 -3- would appear that he has already considered the petitioner's complaints and on examining the complaints, he found that there has been no violation of the Special Economic Zones Act and Rules, and that the 4th respondent has not been avoiding revenue that is due to the Central Government. The 3rd respondent, in its affidavit states that before the Unit of the petitioner was taken over by the 4th respondent, the petitioner was also enjoying duty concessions, which are now enjoyed by the 4th respondent. It is stated that the 4th respondent's unit has been exempted from basic customs duty as per notification No.25/99-Cus, which is available for specified imported goods used for producing specified finished products as part of the taxation policy of the Government of India. It is stated that clearances from Special Economic Zone into Domestic Tariff Area are considered as imports for levy of duty, which should be the duty leviable from an importer similarly situated. 6. Though the 4th respondent has also filed a detailed counter affidavit denying the allegations of the petitioner, in the nature of the controversy that is raised, a detailed reference to the affidavit may not be necessary. WP(C) No.3681/2009 -4- 7. The learned counsel for the petitioner, in his reply, has denied the averments in the affidavit filed by the 3rd respondent that the petitioner was availing of duty concessions prior to transfer of the unit to the 4th respondent. 8. A reading of the counter affidavit filed by the 3rd respondent shows that the 4th respondent is eligible for duty concession, as provided under the notification No.25/99. It is also his case that duty that is leviable on import is the duty that is leviable on the 4th respondent also. Further it is also stated that he has examined the complaint made by the petitioner and has found the same to be without any merit. Thus the allegation raised in the writ petition that the 3rd respondent has not taken cognizance of the complaint and the complaint is remain unattended is incorrect. 9. As already stated, the case of the petitioner is that the 4th respondent is not eligible for duty concessions. This contention is raised relying on Section 30 of the Special Economic Zones Act. On a reading of Section 30 of the Act, I am inclined to think that what is leviable on clearances to Domestic Tariff Area is the duty that is leviable on import. The duty that is leviable is the duty that is WP(C) No.3681/2009 -5- prescribed under the Customs Tariff Act. A reading of Section 30 of the Act, in my view, does not lead to a conclusion that if any concession is allowed by the Government of India, a unit situated in Special Economic Zone area is ineligible for the same. This is what the 3rd respondent has also stated in the counter affidavit. Further reference is also made to notification No.25/99, the benefit of which is being availed of by the 4th respondent. If that be so, there is no factual basis for the contention raised by the petitioner. In view of all these, I see no justification to issue the direction as sought for by the petitioner, or grant a declaration or for a direction to the respondents to consider the representations made by them. The writ petition fails and is, accordingly, dismissed. (ANTONY DOMINIC, JUDGE) jg