The Supreme Court has held that no export duty can be levied on goods supplied from the Domestic Tariff Area (DTA) to Special Economic Zones (SEZs).
The bench of Justice B.V. Nagarathna and Justice R. Mahadevan has observed that Section 12 of the Customs Act, 1962 is the charging Section. However, under Section 26 of the SEZ Act, power is reserved to grant an exemption or a concession if under the provisions of the Customs Act, 1962, a duty is leviable as per the charging Sections.
Since common legal questions were involved, all the civil appeals filed by the Union Of India were heard together and decided by a common judgment. The appeals arose from orders of different High Courts, including Gujarat, Andhra Pradesh, Karnataka, Madras, and Bombay.
The Gujarat High Court examined these issues in detail, holding that export duty cannot be imposed on goods supplied from the Domestic Tariff Area (DTA) to SEZ units or developers. In paragraph 42 of its judgment, it concluded that such movement of goods does not amount to “export” for the purposes of levying duty, and therefore, companies are not liable to pay export duty on DTA-to-SEZ transfers.
The Supreme Court considered the rival contentions in light of the provisions of both the Customs Act (Sections 12, 2(18), 2(27)) and the SEZ Act (Sections 2(i), 2(m), 2(za), and 51).
The Supreme Court has dismissed multiple appeals filed by the Union of India.
Case Details
Case Title: UOI Versus M/S Adani Power Ltd.
Case No.: Civil Appeal No.4489 Of 2023
Date: 28/08/2025
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