Akil Abdul Hamid Kureshi, J.

1. The petitioner has challenged an order dated 23rd January 2013 passed by the Specified Officer (SEZ) of Customs by which the said Officer rejected the petitioner's request for refund of the additional customs duty.

2. The brief facts are that the petitioner is engaged in the manufacture of stone-wool insulation products classified under Chapter 68 of the First Schedule to the Central Excise Tariff Act, 1975. The petitioner's manufacturing unit is situated at Dahej Special Economic Zone. The goods manufactured by the petitioner would be exported. However, subject to certain conditions, a portion of such goods are also allowed to be sold in the local market. These clearances by the Special Economic Zone ('SEZ' for short) unit to the Domestic Tariff Area ('DTA' for short) would be subject to certain conditions imposed by the Government. The question in the petition involves one of chargeability of additional customs duty or popularly referred to as Countervailing Duty ('CVD' for short) on such clearances by the petitioner from its SEZ unit to a DTA. As per the petitioner, in view of the fact that the local manufacturers are not liable to pay any excise duty on manufacture of the said goods by way of exemption notification, no CVD can be collected from the petitioner. The SEZ authorities, however, held a different view. The petitioner, therefore, applied to the said authority for refund of such duty already collected, and for exemption from payment of such duty on the clearances made, where such duty was not so collected. On such application, the said authority passed the impugned order dated 23rd January 2013 holding that the petitioner is not exempt from payment of the CVD. He relied on Section 5A of the Central Excise Act, 1944 to argue that any exemption from payment of excise duty to a local manufacturer would not apply to a SEZ unit. Inter alia on such basis, the petitioner's application was dismissed. The petitioner, therefore, filed this petition and prayed for quashing of the said order. The petitioner has further prayed for a direction restraining the respondents from levying CVD on the goods cleared by the petitioner from its SEZ unit to DTA.

3. Learned Senior Counsel Shri Kamal Trivedi for the petitioner drew our attention to various statutory provisions, and argued that the petitioner being a SEZ unit, though would ordinarily have the liability of payment of CVD on its clearances to DTA, in view of the fact that local manufacturers are exempt from payment of excise duty, the petitioner cannot be saddled with such duty liability. He submitted that CVD is imposed to balance the excise duty burden of the local manufacturers, and when the local manufacturers have no such liability in view of the exemption notification, the SEZ unit cannot be saddled with the liability of excise duty component in terms of CVD.

4. Counsel further submitted that setting up of SEZ, the control of the units situated within such SEZs, and all related issues are now governed by the Special Economic Zones Act, 2005 ('the SEZ Act' for short). Corresponding amendments have been made in Section 3of the Central Excise Act exempting SEZ units from payment of central excise duty. Merely because no amendment is made in Section5 of the Central Excise Act, a liability which does not arise out of a charging provision cannot be fastened.

5. On the other hand, learned counsel Shri Devang Vyas for the Government opposed the petition contending that the Specified Officer has given the correct reasons. The petitioner is obliged to pay CVD on its DTA clearances. This is clearly provided in Section 30 of the SEZ Act. Section 5A of the Central Excise Act further amplifies this position.

6. The SEZ Act was enacted with a view to provide an internationally competent environment for exports and for promoting export led growth. It was noticed that there were several SEZs in existence. Some of them were setup by the Central Governmen