The conditions imposed by the authority should be in consonance with the rules, and the policy imposing restrictions contrary to the Act and Rules would not sustain. The authority's failure to follow mandatory provisions enacted to frame rules can lead to the quashing of the policy and conditions.

JUDGMENT :

PIYUSH AGRAWAL, J.

1. By means of the present writ petition the petitioner has sought a writ of certiorari quashing the Circular No. DO12/20/2015-SEZ dated 13th February, 2018 passed by the respondent No. 2 by which the respondents have sought amendment in circular letter dated 17.9.2013 which was required to be fulfilled by the Units established at Special Economic Zone (in short 'SEZ').

2. We have heard Sri. Nishant Mishra, learned counsel for the petitioner and Sri. B.K. Singh Raghuvanshi, learned counsel for the respondents.

3. Brief facts of the case are that the petitioner is engaged in reprocessing of plastic films/scrap and established Unit in Noida Special Economic Zone. By letter dated 5.11.1997 the petitioner was permitted to recycle plastic raw material from imported scrap in the Export Processing Zone as empowered by Special Economic Zones Act, 2005 (hereinafter referred to as the Act, 2005) read with Special. Economic Zones Rules, 2006 (hereinafter referred to as the Rules, 2006). Section 2(1) and all provisions of the Act, 2005 were made applicable to the petitioner and the letter of approval was extended under Rule, 19(6) of the Rules, 2006 from time-to-time.

4. The petitioner while complying with Section 30 of the Act, 2005 read with Rule 47(1)(a) was making DTA clearance against payment in foreign exchange and on payment of appropriate customs duty as provided under Rule 53 of the Rules, 2006 and thus fulfilling the obligation of maintaining a positive NFE.

5. A Circular No. C6/10/2009-SEZ : dated 17th September, 2013 was issued by the respondent No. 2 imposing additional conditions including that in paragraph 3(x) requiring all plastic recycling units operating in SEZ to ensure that percentage of annual turnover, as mentioned in the letter, is physically exported out of the country.

6. The letter of approval of the petitioner was renewed for a period of five years from 23.11.2013 to 29.11.2018 with a condition that condition imposed by Circular dated 17.9.2013 shall be applicable and is required to be complied with for the first two years.

7. It was argued by the petitioner's counsel that the Gujarat High Court in the case of Imperial Overseas Pvt. Ltd. Vs. Union of India (2017 (350) ELT 359) has quashed the Circular dated 17.9.2013 and, therefore, the Circular dated 17.9.2013 became null and void.

8. It was informed at the Bar that against the judgment in Imperial Overseas Pvt. Ltd. (supra) neither any stay order has been passed nor the said judgment has been set aside. This fact has also not been disputed by the counsel appearing for the respondents.

9. The issued involved here is with regard to levy of certain condition under the Central Act, i.e. Customs Act and any order passed by the High Court is binding upon all the authorities and as such any amendment by means, of the impugned circular is not permissible under law.

10. Learned counsel for the respondent has relied upon the Circular and has only tried to justify the amendment made in the impugned circular.

11. In paragraph No. 31 of the counter affidavit filed by the respondents it has been admitted that against me judgment in Imperial Overseas Pvt. Ltd. (supra) neither any interim order has been passed nor the Revenue has approached the Apex Court.

12. In the judgment of Imperial Overseas Pvt. Ltd. (supra) the Gujarat High Court has held as under;

"20. Now, as per the relevant provisions discussed and reproduced hereinabove, the conditions imposed by the Authority while issuing the LoA to each petitioner are in consonance with the guidelines of 2013. The relevant conditions which are referred to herein above are not in consonance with the Rules since none of the Rules prohibit the unit established in SEZ to remove the goods in DTA. Under Section 55(3) of the SEZ Act, no rules are amended and, therefore, when the petitioner units are following the rules, particularly, Rule 53 of the Rule and in accordance with Section 30 of the Act and paying the custo