Special Economic Zones

Meaning of SEZ
Special Economic Zone (SEZ) is a specifically delineated duty free enclave and shall be deemed to be foreign
territory for the purposes of trade operations and duties and tariffs.
Special Economic Zones are growth engines that can boost manufacturing, augment exports and generate
employment. The private sector has been actively associated with the development of SEZs.

Objectives of SEZ
The objectives of the SEZ are as follows:
1) To make available the goods and services free of taxes and duties;
2) To promote for export production;
3) To provide expeditious and single window approval mechanism; and
4) To provide a package of incentives to attract foreign and domestic investments for promoting export-led
growth.

SEZ Locations in India

At present, eight functional Special Economic Zones located at Santa Cruz (Maharashtra), Cochin (Kerala),
Kandla and Surat (Gujarat),Chennai (Tamil Nadu), Visakhapatnam (Andhra Pradesh), Falta (WestBengal) and
Nodia (Uttar Pradesh) in India. Further a Special Economic Zone at Indore ( Madhya Pradesh ) is now ready for
operation.In addition 18 approvals have been given for setting up of SEZ at Positra(Gujarat), Navi Mumbai and
Kopata (Maharashtra), Nanguneri (Tamil Nadu), Kulpi and Salt Lake (West Bengal), Paradeep and Gopalpur
(Orissa), Bhadohi, Kanpur, Moradabad and Greater Noida (U.P.),Vishakhapatnam and Kakinada (Andhra
Pradesh), Vallarpadam/Puthuvypeen (Kerala) Hassan ( Karnataka), Jaipur and Jodhpur( Rajasthan) on the basis
of proposals received from the State Governments.

Set up of SEZs
* Who can set up SEZ in India
Any private/public/Joint sector or State Government or its agencies can set up Special Economic Zone (SEZ).
Foreign Company can also set up SEZ's in India.

* Application for setting up of SEZs

15 copies of application, indicating name and address of the applicant, status of the promoter along with a project
report covering the following particulars may be submitted to the Chief Secretary of the State:
* Location of the proposed Zone with details of existing infrastructure and that proposed to be established;
* Its area, distance from the nearest seaport / airport / rail / road head etc.
* Financial details, including investment proposed, mode of financing and viability of the project.
* Details of foreign equity and repatriation of dividends etc., if any
* Whether the Zone will allow only certain specific Industries or will be a multi-product Zone.
* The State Government shall, forward it along with their commitment to the following to the Department
of Commerce, Government of India:
* That area incorporated in the proposed Special Economic Zone is free from environmental restrictions;

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 * That water, electricity and other services would be provided as required;
* That the units would be given full exemption in electricity duty and tax on sale of electricity for self
generated and purchased power;
* To allow generation, transmission and distribution of power within SEZ;
* To exempt from State sales tax, octroi, mandi tax, turnover tax and any other duty/cess or levies on the
supply of goods from Domestic Tariff Area to SEZ units;
* That for units inside the Zone, the powers under the Industrial Disputes Act and other related labour Acts
would be delegated to the Development Commissioner and that the units will be declared as a Public
Utility Service under Industrial Disputes Act.
* That single point clearances system and minimum inspections requirement under State Laws/Rules would
be provided.
* The proposal incorporating the commitments of the State Government will be considered by an Inter-
Ministerial Committee in the Department of Commerce. On acceptance of the proposal, a letter of
permission will be issued to the applicant.

* Terms & conditions for setting up of SEZ

Only units approved under SEZ scheme would be permitted to be located in SEZ.
* The SEZ units shall abide by local laws, rules, regulations or bye-laws in regard to area planning,
sewerage disposal, pollution control and the like. They shall also comply with industrial and labour laws
as may be locally applicable.
* Such SEZ shall make security arrangements to fulfill all the requirements of the laws,rules and procedures
applicable to such SEZ.
* The SEZ should have a minimum area of 1000 hectares and at least 25 % of the area is to be earmarked
for developing industrial area for setting up of units.
* Minimum area of 1000 hectares will not be applicable to product specific and port/airport based SEZs
* Wherever the SEZs are landlocked, an Inland Container Depot (lCD) will be an integral part of SEZs.

* Incentives/ Facilities to SEZ Developer

Incentives/Facilities given to SEZ Developer are as follows:
1. 100% FDI allowed for:
(a) Townships with residential, educational and recreational facilities on a case-to-case basis,
(b) Franchise for basic telephone service in SEZ.
2. Income Tax benefit under. (80 IA) to developers for any block of 10 years in 15 years
3. Duty free import/domestic procurement of goods for development,operation and maintenance of SEZs.
4. Exemption from Service Tax /CST.
5. Income of infrastructure capital fund/co. from investment in SEZ exempt from Income Tax
6. Investment made by individuals etc in a SEZ Co also eligible for exemption u/s 88 of IT Act
7. Developer permitted to transfer infrastructure facility for operation and maintenance.
8. Generation, transmission and distribution of power in SEZs is allowed
9. Full freedom in allocation of space and built up area to approved SEZ units on commercial basis.
10. Authorised to provide and maintain service like water, electricity, security, restaurants and recreation
centers on commercial lines.
* Incentive/facilities for SEZ units
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Following incentive/facilities to SEZ enterprises:

Under Customs and Excise:

* SEZ units may import or procure from the domestic sources, duty free, all their requirements of capital
goods, raw materials, consumables, spares, packing materials, office equipment, DG sets etc. for
implementation of their project in the Zone without any license or specific approval.
* Duty free import/domestic procurement of goods for setting up of SEZ units.
* Goods imported/procured locally duty free could be utilised over the approval period of 5 years.
* Domestic sales by SEZ units will now be exempt from SAD.
* Domestic sale of finished products, by-products on payment of applicable Custom duty.
* Domestic sale rejects and waste and scrap on payment of applicable Custom duty on the transaction value

Under Income tax:

* Physical export benefit
* 100% IT exemption (1OA) for first 5 years and 50% for 2 years thereafter.
* Reinvestment allowance to the extend of 50% of ploughed back profits
* Carry forward of losses

Under Foreign Direct Investment:

* 100% foreign direct investment is under the automatic route is allowed in manufacturing sector in SEZ
units except arms and ammunition, explosive, atomic substance, narcotics and hazardous chemicals,
distillation and brewing of alcoholic drinks and cigarettes, cigars and manufactured tobacco substitutes.
* No cap on foreign investments for SSI reserved items.

Under Banking / Insurance/External Commercial Borrowings:

* Setting up Off-shore Banking Units allowed in SEZs. OBU's allowed 100% Income Tax exemption on
profit for 3 years and 50% for next two years.
* External commercial borrowings by units up to $ 500 million a year allowed without any maturity
restrictions.
* Freedom to bring in export proceeds without any time limit.
* Flexibility to keep 100% of export proceeds in EEFC account. Freedom to make overseas investment
from it.
* Commodity hedging permitted.
* Exemption from interest rate surcharge on import finance.
* SEZ units allowed to `write-off' unrealized export bills.

Under Central Sales Tax Act:

* Exemption to sales made from Domestic Tariff Area to SEZ units.

Under Service Tax:

* Exemption from Service Tax to SEZ units

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Under Environment:
* SEZs permitted to have non-polluting industries in IT and facilities like golf courses, desalination plants,
hotels and non-polluting service industries in the Coastal Regulation Zone area
* Exemption from public hearing under Environment Impact Assessment Notification

Under Companies Act:

* Enhanced limit of Rs. 2.4 crores per annum allowed for managerial remuneration
* Agreement to opening of Regional office of Registrar of Companies in SEZs.
* Exemption from requirement of domicile in India for 12 months prior to appointment as Director.

Under Drugs and Cosmetics:

* Exemption from port restriction under Drugs & Cosmetics Rules.

Under Sub-Contracting/Contract Farming:

* SEZ units may sub-contract part of production or production process through units in the Domestic Traiff
Area or through other EOU/SEZ units
* SEZ units may also sub-contract part of their production process abroad.
* Agriculture/Horticulture processing SEZ units allowed to provide inputs and equipments to contract
farmers in DTA to promote production of goods as per the requirement of importing countries.

SEZ program in India looks like a success story. But presently It is mired with many controversies and problems.
Enumerate them.
The SEZ program in India is surrounded by the following controversies and problems:
1) The zones are often two small as little as 100 hectares and for gems and jewellery, biotech only 10
hectares. Proving quality infrastruture in such a small can have no real meaning.
2) Problems relating to acquisition of land and compensation to land owners.
3) Weak transport linkages for SEZs located in the interiors.
4) Investment creating vs. investment diverting (new units vs. shifting by old units).
5) Exemptions from service tax on taxable services provided to developer or unit to carry on the authorized
operations in SEZ.
6) Exemptions from securities transaction tax (under section 98 of the Finance Act, 2004), in case the
taxable securities transactions are entered into by a non-resident through the International Financial
Services Centre.
7) Exemptions from the levy of taxes on the sale or purchases of goods other than newspapers (under the
Central Sales Tax Act,1956), if such goods are meant to carry on the authorized operations by the
developer or entrepreneur.
8) 100% tax exemption for 3 years and 50% for 2 years under section-8OLA of the Income Tax Act, 1961
for the offshore banking units.
9) Facility to realize and repatriate export proceedings within 12 months.
10) Recently RBI has asked commercial to have proper risk exposure to loans granted to SEZ developers.
11) Farmers, opposition to acquisition of ,and in West Bengal. Haryana and Maharashtra.

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Salient features of the Special Economic Zone (SEZ) Act, 2005
The salient features of the SEZ Act, 2005 are as follows:
1) Matters relating to establishment of SEZ and for setting up of units therein, including requirements,
obligations and entitlements.
2) Matters relating to requirements for setting up of off-shore banking units and units in International
Financial Centre in SEZ, including fiscal regime governing the operation of such units.
3) The fiscal regime for developers of SEZ and units set up therein.
4) Single window clearance mechanism at the zone level.
5) Establishment of an authority for each SEZ set up by the Central Government to impart greater
administrative autonomy; and
6) Designation of special courts and single enforcements agency to ensure speedy trial and investigation of
notified offences committed in SEZ.

Definition Clause

1. Co-Developer (u/s 2(g)] means

(i) a person who, or
(ii) a State Government
which, has been granted a letter of approval by the Central Government U/S 3(12).

2. Developer (u/s2(f)] means

(i) a person who, or
(ii) a State Government
which, has been granted a letter of approval by the Central Government U/S 3(10); and
(iii) includes an Authority and a Co-Developer;

3. Domestic Tariff Area (u/s2(i)] means

The whole of India (including the territorial waters and continental shelf) But does not include the areas of
the Special Economic Zones.

4. Entrepreneur (u/s2(j)] means

a person who has been granted a letter of approval by the Development Commissioner u/s15(9).

5. Export(u/s2(m)] means -
(i) taking goods or providing service from a Special Economic Zone to out of India; or.
(ii) supplying goods or providing services from the Domestic Tariff Area (DTA) to a Unit or Developer; or
(iii) supplying goods or providing services from one Unit to another Unit or Developer in the same or
different SEZ.

6. Free Trade andWarehousing Zone(u/s2(n)]" means

a Special Economic Zone wherein mainly trading and warehousing and other activities related thereto are
carried on.

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7. Import(u/s2(o)]" means -
(i) bringing goods or receiving services in a SEZ by a Unit or developer from a place outside India; or
(ii) receiving goods, or services by one Unit or Developer from another Unit or Developer of the same SEZ
or a different SEZ;

8. Infrastructure facilities(u/s2(p)] means

industrial, commercial or social infrastructure or other facilities necessary for the development of a Special
Economic Zone or such other facilities which may be prescribed;

9. International Financial Services Centre(u/s2(q)] means

an International Financial Services Centre which has been approved by the Central Government u/s18(1).

10. Manufacture [u/s2(r)] means

to make, produce, fabricate, assemble, process or bring into existence, by hand or by machine, a new
product having a distinctive name, character or use and shall include processes such as refrigeration,
cutting, polishing, blending, repair, remaking, re-engineering and includes agriculture, aquaculture,
animal husbandry, floriculture, horticulture, pisciculture, poultry, sericulture, viticulture and mining;

11. Offshore Banking Unit (u/s2(u)] means

a branch of a bank located in a Special Economic Zone and which has obtained the permission under
clause (a) of sub-section (1) of section 23 of the Banking Regulation Act, 1949;

12. Services (u/s2(z)] means

such tradable services which-
(i) are covered under the General Agreement on Trade in Services annexed as lB to the Agreement
establishing the World Trade Organisation concluded at Marrakesh on the 15th day of April, 1994;
(ii) may be prescribed by the Central Government for the purposes of this Act; and
(iii) earn foreign exchange;

Procedure for making proposal to establish Special Economic Zone (SEZ)

Procedure for making proposal to establish SEZ:
(1) Special Economic Zone may be established under this Act, either jointly or severally by the Central
Government, State Government,or any person for manufacture of goods or rendering services or for both
or as a Free Trade and Warehousing Zone.
(2) Any person, who intends to set up a Special Economic Zone, may, after identifying the area, make a
proposal to the State Government concerned for the purpose of setting up the Special Economic Zone.
(3) Notwithstanding anything contained above, any person, who intends to set up a Special Economic Zone,
may, after identifying the area, at his option, make a proposal directly to the Board for the purpose of
setting up the Special Economic Zone.
Provided that where such a proposal has been received directly from a person under sub-section,the Board
may grant approval and after receipt of such approval, the person concerned shall obtain the concurrence
of the State Government within the period, as may be prescribed.

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 (4) In case a State Government intends to set up a Special EconomicZone, it may after identifying the area,
forward the proposal directly to the Board for the purpose of setting up the Special Economic Zone.
Provided that the Central Government may:-
(a) after consulting the State Government concerned;
(b) without referring the proposal for setting up the Special Economic Zone to the Board; and
(c) after identifying the area; suo moto set up and notify the Special Economic Zone.
(5) Every proposal under point (2) to (4) shall be made in such form and manner containing such particulars
as may be prescribed.
(6) The State Government may, on receipt of the proposal made under point (2), forward the same together
with its recommendations to the Board within such period as may be prescribed.
(7) Without prejudice to the provisions contained in point (8), the Board may, after receipt of the proposal
under point (2) to (4),approve the proposal subject to such terms and conditions as It may deem fit to
impose, or modify or reject the proposal.
(8) The Central Government may prescribe the following requirement for establishment of a Special
Economic Zone, namely:-
(a) The minimum area of land and other terms and conditions subject to which the Board shall approve,
modify or reject any proposal received by it under point (2) to (4) ; and
(b) The terms and conditions, subject to which the Developer shall undertake the authorised operations
and his obligations and entitlements.
Provided that different minimum are of land and other terms and conditions referred to in clause (a) may
be prescribed by the Central Government for a class or classes of Special Economic Zones.
(9) If the Board,-
(a) Approves without any modification, the proposal received under point (2) to (4), it shall
communicate the same to the Central Government;
(b) Approves with modifications the proposal received under point (2) to (4), it shall, communicate such
modifications to the person or the State Government concerned and if such modifications have been
accepted by such person or the State Government, the Board shall communicate the approval to the
Central Government;
(c) Rejects the proposal, received under point (2) to (4), it shall record the reasons therefor and
communicate the rejection to the Central Government which shall intimate to the State Government or
the person concerned.
(10) The Central Government shall, on receipt of communication under clause (a) or clause (b) of point (9),
grant, within such time as may be prescribed, a letter of approval on such terms and conditions and
obligations and entitlements as may be approved by the Board, to the Developer, being the person or the
State Government concerned:
Provided that the Central Government may, on the basis of approval of the Board, approve more than one
Developer in a Special Economic Zone in cases where one Developer does not have in his possession the
minimum area of contiguous land, as may be prescribed, for setting up a Special Economic Zone and in
such cases, each Developer shall be considered as a Developer in respect of the land in his possession.
(11) Any person who, or a State Government which, intends to provide any infrastructure facilities in the
identified area referred to in point (2) to (4), or undertake any authorised operation may, after entering
into an agreement with the Developer referred to in point (10), make a proposal for the same to the Board

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 for its approval and the provisions of point (5) and point (7) to (10) shall, as far as may be, apply to the
said proposal made by such person or State Government.
(12) Every person or a State Government referred to in point (11),whose proposal has been approved by the
Board and who, or which, has been granted letter of approval by the Central Government, shall be
considered as a Co-Developer of the Special Economic Zone.
(13) Subject to the provisions of this point and the letter of approval granted to a Developer, the Developer
may allocate space or built up area or provide infrastructure services to the approved units in accordance
with the agreement entered into by him with the entrepreneurs of such Units.

Guidelines that should be considered by the Central Government while notifying an area as an SEZ
The Central Government, while notifying any area as a Special Economic Zone or an additional area to be
included in the Special Economic Zone and discharging its functions under this Act, shall be guided by the
following, namely:-
1) Generation of additional economic activity
2) Promotion of exports of goods and services;
3) Promotion of investment from domestic and foreign sources;
4) Creation of employment opportunities;
5) Development of infrastructure facilities; and
6) Maintenance of sovereignty and integrity of India, the security of the State and friendly relations with
foreign States.

How the area falling under the SEZ is demarcated by the Central Government
The areas falling within the Special Economic Zones may be demarcated by the Central Government or any
authority specified by it as -
(a)The processing area for setting up Units for activities, being the manufacture of goods, or rendering
services (Processing area);or
(b)The area exclusively for trading or warehousing purposes (FTWH);or
(c)The non-processing areas for other activities for e.g. canteen,Hospital, etc. (Non processing area).

The Duties, powers and functions of Board of Approval

As per section 9 of SEZ Act, 2005, the Board has following duties,powers and functions which are as follows:
1) granting of approval or rejecting proposal or modifying such proposals for establishment of the Special
Economic Zones;
2) granting approval of authorised operations to be carried out in the Special Economic Zones by the
Developer;
3) granting of approval to the Developers or Units (other than the Developers or the Units which are exempt
from obtaining approval under any law or by the Central Government) for foreign collaborations and
foreign direct investments, (including investments by a person resident outside India), in the Special
Economic Zone for its development, operation and maintenance;
4) granting of approval or rejecting of proposal for providing infrastructure facilities in a Special Economic
Zone or modifying such proposals;

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5) granting, notwithstanding anything contained in the Industries (Development and Regulation) Act, 1951,
a licence to an industrial undertaking referred to in clause (d) of section 3 of that Act, if such undertaking
is established, as a whole or part thereof,or proposed to be established, in a Special Economic Zone;
6) suspension of the letter of approval granted to a Developer and appointment of an Administrator under
sub-section (1) of section10;
7) disposing of appeals preferred under sub-section (4) of section15;
8) disposing of appeals preferred under sub-section (4) of section16;
9) performing such other functions as may be assigned to it by the Central Government.
10) The Board may if so required for purposes of this Act or any other law for the time being in force relating
to Special' Economic Zones, by notification, decide as to whether a particular activity constitutes
manufacture as defined in clause (r) of clause 2 and such decision of the Board shall be binding on all
Ministries and Departments of the Central Government.
The Board may delegate such powers and functions as it may deem fit to one or more Development
Commissioners for effective and proper discharge of the functions of the Board.Without prejudice to the
foregoing provisions of this Act, the Board shall, in exercise of its powers or the performance of its functions
under this Act, be bound by such directions on the questions of policy as the Central Government may give in
writing to it from time to time.

When can the board of approvals suspend the letter of approval and transfer of SEZ
The Board can suspend the letter of approval and transfer of SEZ if it is of the opinion that a Developer [u/s10] -
1) is unable to discharge the functions or perform the duties imposed on him by or under the provisions of
this Act or rules made there under; or
2) has persistently defaulted in complying with any direction given by the board under this Act,'
3) has violated the terms and conditions of the letter of approval; or
4) whose financial position is such that he is unable to fully and efficiently discharge the duties and
obligations imposed on him by the letter of approval, and
5) the circumstances exist which render it necessary for it in public interest so to do,
The Board may, on application, or with the consent of the Developer, or otherwise, for reasons to be recorded in
writing ,suspend the letter of approval, granted to the Developer for a whole or part of his area established as
Special Economic Zone, for a period not exceeding one year and appoint an Administrator to discharge the
functions of the Developer in accordance with the terms and conditions of the letter of approval and manage the
Special Economic Zone accordingly. No letter of approval shall be suspended unless the Board has given to the
Developer not less than three months' notice, in writing, stating the grounds on which it proposes to suspend the
letter of approval, and has considered any cause shown by the Developer within the period of that notice, against
the proposed suspension. The Board may, instead of suspending the letter of approval, permit it to remain in
force subject to such further terms and conditions as it thinks fit to impose, and any further terms or conditions
so imposed shall be binding upon and be complied with by the Developer and shall be of like force and effect as
if they were contained in the letter of approval.
Where the Board has given notice for suspension of letter of approval, the Developer may, after prior approval of
the Board, transfer his letter of approval to any person who is found eligible by the Board for grant of such
approval.

The functions of Development Commissioner

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The functions of Development Commissioner are follows (u/s12):
1) Guide the entrepreneurs for setting up of Units in the Special Economic Zone;
2) Ensure and take suitable steps for effective promotion of exports from the .Special Economic Zone;
3) Ensure proper co-ordination with the Central Government or State Government Departments concerned
or agencies with respect to,or for the above purposes.
4) Monitor the performance of the Developer and the Units in a Special Economic Zone
5) Discharge such other functions as may be assigned to him by the Central Government under this Act or
any other law for the time being in force; and
6) Discharge such other functions as may be delegated to him by the Board.
Every Development Commissioner may call for such information from a Developer or Unit from time to time as
may be necessary to monitor the performance of the Developer or the Unit, as the case may be.
The Development Commissioner, may, delegate any or all of his powers or functions to any of the officers
employed under him.

The powers and functions of Approval Committee

The powers and functions of Approval Committee are as follows:
1) Approve the import or procurement of goods from the Domestic Tariff Area, in the Special Economic
Zone for carrying on the authorised operations by a Developer;
2) Approve the providing of services by a service provider from outside India, or from the Domestic Tariff
Area for carrying on the authorised operations by the Developer, in the Special Economic Zone;
3) Monitor the utilisation of goods or services or warehousing or trading in the Special Economic Zone;
4) Approve, modify or reject proposals for setting up Units for manufacturing or rendering services or
warehousing or trading in the Special Economic Zone in accordance with the provisions section 15(8) of
the Act;
5) Allow, on receipt of approval, foreign collaborations and foreign direct investments including investments
by a person outside India for setting up a Unit;
6) Monitor and supervise compliance of conditions subject to which the letter of approval or permission, if
any, has been granted to the Developer or entrepreneur; and
7) perform such other functions as may be entrusted to it by the Central Government or the State
Government concerned, as the case may be.
In case the developer is Central Government, the Approval Committee has been empowered to exercise all
powers of the committee, until the Constitution of Approval Committee.

The procedure of set up a Unit by entrepreneur

The procedure of setting up of units by entrepreneur is prescribed u/s15 of the SEZ, Act, 2005.
Any person, who intends to set up a Unit for carrying on the authorised operations in a Special Economic Zone,
may submit a proposal to the Development Commissioner concerned in such form and manner containing such
particulars as may be prescribed. Provided that an existing Unit shall be deemed to have been set up in
accordance with the provisions of this Act and such Units shall not require approval under this Act.
On receipt of the proposal, the Development Commissioner shall submit the same to the Approval Committee
for its approval. The Approval Committee may, either approve the proposal without modification, or approve the
proposal with modifications subject to such terms and conditions as it may deem fit to impose, or reject the
proposal. Provided that in case of modification or rejection of a proposal, the Approval Committee shall afford a
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reasonable opportunity of being heard to the person concerned and after recording the reasons, either modify or
reject the proposal. Any person aggrieved, by an order of the Approval Committee, may prefer an appeal to the
Board within such time as may be prescribed. No appeal shall be admitted if it is preferred after the expiry of the
time prescribed therefore. Provided that an appeal may be admitted after the expiry of the period prescribed
therefore if the appellant satisfies the Board that he had sufficient cause for not preferring the appeal within the
prescribed time.

Who can cancel the letter of approval granted to entrepreneur and in what circumstances
The Approval Committee may, at any time, if it has any reason or cause to believe that the entrepreneur has
persistently contravened any of the terms and conditions or its obligations subject to which the letter of approval
was granted to the entrepreneur, cancel the letter of approval. Provided that no such letter of approval shall be
cancelled unless the entrepreneur has been afforded a reasonable opportunity of being heard. Where the letter of
approval has been cancelled, the Unit shall not from the date of such cancellation, be entitled to any exemption,
concession, benefit or deduction available to it, being a Unit, under this Act. Any person aggrieved by an order
of the Approval Committee regarding cancellation of letter of approval granted to him, may prefer an appeal to
the Board within such time as may be prescribed. No appeal shall be admitted if it is preferred after the expiry of
the time prescribed therefore. Provided that an appeal may be admitted after the expiry of the period prescribed
there for if the appellant satisfies the Board that he had sufficient cause for not preferring the appeal within the
prescribed time.

Short Notes:

1. Agency to inspect (u/s20):

Notwithstanding anything contained in any other law for the time being in force, the Central Government may,
by notification, specify any officer or agency to carry out surveys or inspections for securing of compliance with
the provisions of any Central Act by a Developer or an entrepreneur, as the case may be, and such officer or
agency shall submit verification and compliance reports, in such manner and within such time as may be
specified in the said notification.

2. Single enforcement officer or agency for notified offences (u/s21):

The Central Government may, by notification, specify any act or omission made punishable under any Central
Act, as notified offence for purposes of this Act. The Central Government may, by general or special order,
authorise any officer or agency to be the enforcement officer or agency in respect of any notified offences or
committed in a Special Economic Zone.
Every officer or agency authorised under sub-section (2) shall have all the corresponding powers of
investigation, inspection or search or seizure as is provided under the relevant Central Act in respect of the
notified offences.

3. Investigation, inspection and search or seizure (u/s22):

The agency or officer, specified under section 20 or section 21,may, with prior intimation to the Development
Commissioner concerned, carry out the investigation or search or seizure in the Special Economic Zone or in a
Unit if such agency or officer has reasons to believe (reasons to be recorded in writing) that a notified offence
has been committed or is likely to be committed in the Special Economic Zone: Provided that no investigation,
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search or seizure shall be carried out in a Special Economic Zone by any agency or officer other than those
referred in section 21 without prior approval of the Development Commissioner concerned. Provided further that
any officer of agency, if so authorised by the Central Government, may carry out the investigation, inspection,
search or seizure in the Special Economic Zone or Unit without prior intimation or approval of the Development
Commissioner.

4. Designated Courts to try suits and notified offences(u/s23) :

The State Government, in which the Special Economic Zone is situated, may, with the concurrence of the Chief
Justice of the High Court of that State, designate one or more courts-
(a) To try all suits of a civil nature arising in the Special Economic Zone; and
(b) To try notified offences committed in the Special Economic Zone.
No court, other than the court designated above, Shall try any suit or conduct the trial of any notified offence
referred above.
Provided that the courts, in which any suit of a civil nature in a Special Economic Zone had been filed before the
commencement of this Act, shall continue to try such suit after such commencement.
Provided further that the courts in which any trial of any notified offence is being conducted before the
commencement of this Act, shall continue to conduct the trial of such offence after the commencement of this
Act.
Provided also that the courts competent to try any notified offence before the commencement of this Act, shall
conduct the trial in respect of such offence after the commencement of this Act until the courts have been
designated above and all such cases relating to such trials shall thereafter be transferred to such Courts so
designated which shall conduct the trial from the stage at which such cases were so transferred.

5. Remedy available to the person aggrieved against the order of the court designated u/s23
As per section 24 of SEZ Act, 2005, any person aggrieved, by any decision or order of the court designated
section 23, may file an appeal to the High Court within sixty days from the date of communication of the
decision or order of the Courts so designated to him on any question of fact or law arising out of such orders.
Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from
filing an appeal within the said period, allow it to be filed within a further period not exceeding sixty days.
Explanation - In section 23 and this section "High Court" means the High Court of the State in which the Special
Economic Zone is situated.

Provisions of SEZ Act, 2005 related to offences by companies

Where an offence has been committed by a company, every person, who at the time the offence was committed
was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as
the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished
accordingly.
Explanation.- For the purposes of this section,-
(a) "company" means any body corporate and includes a firm or other association of individuals; and
(b) "director", in relation to a firm, means a partner in the firm.

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