Supreme Court quashes Mundra SEZ customs duty
Removes customs-duty liability for SEZ-to-domestic electricity for the specified period and imposes a binding obligation on the Ministry of Power and customs authorities to refund deposited amounts within eight weeks without interest.
Change
The Supreme Court held Adani Power not liable for customs duty on electricity supplied from its Mundra SEZ to the domestic market and directed refunds of amounts deposited for supplies between September 16, 2010 and February 15, 2016.
Why it matters
A bench of Justices Aravind Kumar and NV Anjaria set aside a 2019 Gujarat High Court order and applied the Supreme Court's 2015 decision on a similar issue. The court directed the Ministry of Power and customs authorities to refund amounts deposited against customs-demanded duty for electricity supplied from the Mundra SEZ to the domestic tariff area between September 16, 2010 and February 15, 2016. Refunds are to be issued within eight weeks and will carry no interest. The Mundra thermal plant has 5,200 MW capacity, with part of its output consumed inside the SEZ and the remainder supplied outside the zone. Customs-duty history cited includes a 2010 16% levy and a 2012 switch to a specific rate (₹0.10 per unit, later reduced to ₹0.03 per unit) applied retroactively from September 16, 2010.
Implications
- — Ministry of Power and customs authorities must process and disburse refunds for deposited amounts within an eight-week window without paying interest.
- — Customs authorities cannot retain deposited duty amounts tied to Mundra SEZ electricity sales for September 16, 2010–February 15, 2016.
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