TMI Blog2010 (7) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the principle of ascertaining legislative intention not only by looking into the words used but also from the words omitted, the absence of the word “exclusive” cannot be construed to mean that the notification can be so read that it would defeat the very purpose behind the notification nor it is permissible to enlarge the scope of the benefit under the notification. Explanation is added to any statutory provision to avoid any ambiguity arising out of the main statutory provision. The explanation cannot have existence independent of the main statutory provision. Being so, based on explanation itself, one is not entitled to enlarge the scope of the main notification more so, when the explanation is added to clarify what is stated in the main part of the notification. Prohibition of withdrawal is from the project site. But arrival of goods at the site by availing benefit under the notification has to be on supply of such goods ‘to’ the project ‘for’ the use at the project site, from where such goods cannot be withdrawn by the contractor even after completion of the project work. In other words, he cannot claim any ownership right over such goods. - E/752/2010-EX(BR) - 560/2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. 5. Ld. Advocate for the appellants placing reliance in the decisions in the matter of Caterpillar India Pvt. Ltd. reported in 2005 (185) E.L.T. 430 (Tribunal), CC, Mumbai v. Toyo Engineering India Ltd. reported in 2006 (201) E.L.T. 513 (S.C.), Indian Charge Chrome Ltd. v. CC, Bhubaneswar-I reported in 2001 (138) E.L.T. 609 (Tribunal-Kolkata), Commissioner of Customs v. Indian Charge Chrome Ltd. reported in 2003 (157) E.L.T. A-138, Automatic Electric Ltd. v. CCE, Mumbai reported in 2004 (178) E.L.T. 524 (Tribunal-Mumbai), Central Board of Dawoodi Bohra Community v. State of Maharashtra reported in 2010 (254) E.L.T. 196 (S.C.) submitted that the law relating to entitlement of benefit under the said notification is well settled by the said decisions and, therefore, the decisions delivered by the Tribunal in Escorts Construction Equipment Ltd. v. CCE, Delhi-IV reported in 2009 (244) E.L.T. 151 (Tribunal-Delhi) and in unreported decision in the matter of M/s. Action Construction Equipment Ltd. v. CCE, Delhi-IV in Stay Application No. 7 of 2010 in Appeal No. 10 of 2010 on 9-4-2010 [2010 (257) E.L.T. 559 (T)] cannot be the basis to deny the benefit of the said notification to the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the matter of Mercedes Benz India Pvt. Ltd. v. U.O.I, reported in 2010 (252) E.L.T. 168. 6. Ld. DR, on the other hand, placing reliance in the decision in matter of W.P.I.L. Ltd. v. CCE, Meerut (U.P.) reported in 2005 (181) E.L.T. 359 (S.C.), Sulochana Amma v. Narayanan Nair reported in 1995 (77) E.L.T. 785 (S.C.) and Coromandel Fertilizers Ltd. v U.O.I. reported in 1984 (17) E.L.T. 607 (S.C.) submitted that the Explanation No. II added to the Notification clearly discloses that the goods supplied to the project cannot be withdrawn and the same being in the form of explanation, it is clarificatory in nature and the same is therefore retrospective and will apply to the case in hand. Having so applied, it would disclose that the goods cannot be supplied to the contractor or supplier, but are necessarily to be supplied to the project. Referring to the decisions in the matter of Toyo Engg. India Ltd., IBM India Pvt. Ltd. and Caterpillar India Pvt. Ltd, ld. DR submitted that the said decisions were delivered prior to the Explanation No. II being introduced in the said Notification. He further submitted that the issue before the Larger Bench in Toyo Engg. India s case was different f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter, there was no dispute that the goods were supplied to the project. Added to this as rightly pointed by the ld. DR, the decision does not disclose any reference to the Explanation No. II. The decision also does not disclose any discussion on the point of scope of the notification in question. 10. In Caterpillar India Pvt. Ltd. case, the Tribunal held that the notification in question nowhere stipulates that the excisable goods supplied should be directly paid for by the organisation financing the project. It was further held that it is not the case of the Department that the goods have not been supplied to the project financed by the International Organisations and, therefore, it was held that since the goods have admittedly been used for the project, the question of mis-use of the goods for un-intended purposes, as noted by the Commissioner does not arise. Undoubtedly, the show cause notice in the said case was issued for denial of the benefit of the notification in question on the ground that the Caterpillar India Pvt. Ltd. had cleared the loaders to contractors of the respective projects and not to the projects implementing authorities and the contractors continued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the goods, which were classifiable under Heading No. 98.01. The entry under Heading No. 98.01 read thus :- 98.01 All items of machinery including prime movers, instruments, apparatus and appliances; control gear and transmission equipment, auxiliary equipment (including those required for research and development purposes, testing and quality control), as well as all components (whether finished or not) or raw materials for the manufacture of the aforesaid items and their components, required for the initial setting up of a unit, or the substantial expansion of an existing unit, of a specified; (1) industrial plant, (2) irrigation project, (3) power project, (4) mining project, (5) project for the exploration for oil or other minerals, and (6) having regard to the economic development of the country notify in the official gazette in this behalf; and spare parts, other raw materials (including semi-finished material), or consumable stores not exceeding 10% of the value, of the goods specified above provided that such spare parts, raw materials or consumables stores are essential for the maintenance of the plant or project mentioned in 1 to 6 above. (Emphasis s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court. The Apex court, after taking note of the fact that the benefit which was claimed thereunder was in relation to the machinery used under the Project Import Scheme read with Notification No. 72/85-Cus., dated 17-3-85 and the description of Heading No. 98.01, specifically observed that it is not disputed that construction equipments imported by the respondents were used in the initial setting up of the plant. The Asstt. Commissioner and the Appellate Authority denied the facility of the Project Import as the ownership of the imported goods would not pass on to the Project Authority and that the machinery imported could be utilised elsewhere in setting up of any other plant . Having observed so, it was held that what required under Heading No. 98.01 of Customs Tariff Act is that the machinery imported should be required for the initial setting up of a unit, or the substantial expansion of an existing unit . This heading specifically mentions and includes auxiliary equipments . Obviously, therefore, the Apex Court confirmed the decision of the Larger Bench in Toyo Engg. on consideration of the scope of entry of the Heading No. 98.01 read with the Project Imports Scheme and No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner, under Adjudication Order dated 29-10-1997 confirmed the demand of duty and imposed a penalty of Rs. 62,25,991/- holding that the exemption is to be allowed only on production of the requisite certificate; that the certificate issued by Rail India Technical Economic Services Ltd. (RITES) can not be accepted for the purpose of the notification. On appeal, the Commissioner (Appeals) also rejected the appeal, holding that goods involved is Folic Acid and Ferrous Sulphate Tablets and not Drug kit A to be supplied under the project; and that Notification 108/95 is applicable only when the cost of relevant project is borne by the U.N. or International Organizations and not in those cases where money is borrowed by the Government for implementation of certain projects. 20. In the above facts, the Tribunal held thus :- 8. It is not in dispute that the medicine in question was supplied in pursuance of a project of World Bank and Government of India. The show cause notice for denying the benefit of notification was issued only on the ground that requisite certificate was not submitted by the Appellants. It has been shown by the Appellants through World Bank s two letters dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period in demanding the duty as there is no suppression of facts with intent to evade duty. In the circumstances, the impugned Order in Appeal does not have any merit. We allow this appeal with consequential relief, if any. 23. In Indian Charge Chrome Ltd., the dispute related to fulfilment of post-importation conditions of Notification No. 13/81-CUS, dated 9-2-81. Therein admittedly, the captive power plant was allowed to import in terms of letter of intent dated 26-11-84 issued by the Government of India to meet the power requirement of 100% EOUs and on exemption from the payment of customs duty was also allowed by the Revenue under the said notification in terms of the orders passed by the Supreme Court on 5-6-1985. Therein, the Tribunal observed that it is not the Revenue s case that the power so generated in the captive power plant has not been used by M/s. ICCL and M/s. IMFA in the production of the goods, which have been ultimately exported. But their objection seems to be that the surplus power so generated in the captive power plant besides catering to the needs of the aforementioned EOUs has also been used by Orissa State Electricity Board for consumption/distribution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er should be referred to a Larger Bench. It is a subversion of judicial process not to follow this procedure. 26. As already seen above, it is not a matter of disagreement with the decision arrived at by the Coordinate Bench or a Larger Bench-on a similar issue. The issue involved in the matter relates to entitlement of benefit under the notification in question even though the supply of goods are made to the contractor or supplier. The denial of benefit is on the ground that the supply has been made to the contractor and not to the Project Authority itself. Though to some extent the said point was sought to be raised in Catterpillar India Pvt. Ltd. case as well as in IBM s case, the same were not answered with reference to the notification in question and the matters were decided on the undisputed facts in the said cases. Proper reading of the orders passed in both the decisions would disclose that the matters came to be concluded on an admitted and undisputed facts and not on the interpretation of the notification. Being so, it is not a case of not agreeing with the decision of Coordinate Bench . It is a settled law that for reference of a matter to a Larger Bench, there has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e such a decision, same being a decision per incuriam. 29. The Apex Court in Central Board of Dawoodi Bohra Community s case held that per incuriam means a decision rendered by ignorance of a previous binding decision such as decision of its own or of a Court of Coordinate or higher jurisdiction or in ignorance of the terms of a Statute or of a rule having force of law. A ruling making a specific reference to an earlier binding precedent may or may not be correct but cannot be said to be per incuriam. 30. The above ruling of the Apex Court is obviously on the basis of basic principle of law relating to the principle of per incuriam as was explained in Salmond on Jurisprudence , the 12th Edition of the said book on the said subject reads thus, a precedent is not binding if it was rendered in ignorance of a statute or a rule having the force of statute i.e. delegated legislation. This rule was laid down for the House of Lords by Lord Halsbury.........it was given as the leading example of a decision per incuriam, which would not be binding on the court. The rule apparently applies even though the earlier Court knew of the statute in question, if it did not refer to, and had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... execution of the said project and that the said project had duly been approved by the Government of India; or (ii) supplied to a project that has been approved by the Government of India and financed (whether by a loan or a grant) by an international organisation listed in the said Annexure, a certificate from an officer not below the rank of Deputy Secretary to the Government of India, in the Ministry of Finance (Department of Economic Affairs) that the said goods are required for the execution of the said project and that the said project has duly been approved by the Government of India. (c) In case the said goods are intended to be supplied to a project financed (whether by a loan or a grant) by the World Bank, the Asian Development Bank of any international organisation other than those listed in the Annexure, and (i) If the said project has been approved by the Government of India, a certificate from the executive head of the Project Implementing Authority and countersigned by an officer not below the rank of a Joint Secretary to the Government of India, in the concerned Line Ministry in the Government of India, that the said goods are required for the exec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest involved in the matter while issuing the notification. The same is apparent from the expression with which the notification begins. It is clearly stated therein that, it is necessary in public interest sought to do........ The notification further, discloses that the exemption has been confined to the goods, which are supplied to particular institution and rather supplied for particular use at particular location. While prescribing these limitations, the words like for and to have been used in order to the identity of the institution for which the goods are required to be supplied as well as the use thereof to be made and the location where the same is to be used. 33. The word for has been defined in the Oxford Dictionary to mean in favour of, affecting or with regard to, on behalf of or to the benefit of, having as a purpose or function, having as a reason or cause, having as a purpose or function, having as a reason or cause, having as a destination, representing, in exchange for, in relation to the expected norm of, and indicating the extent of a distance or the length of a period of time as well as indicating an occasion in a series. 34. The word to has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the proviso and with the restriction that the same could not be withdrawn from the project as specified in the second explanation. Indeed it was clearly held in Escorts Construction s case thus :- A plain reading of the above relevant portion of the notification discloses that exemption to the goods is available only in case of the goods, which are intended to be supplied to project financed by the World Bank or Asian Development Bank or any International Development Bank. In other words, supply of goods, in order to avail the exemption under the said notification, has necessarily to be to the project specified in the said notification. 37. It was then sought to be contended that the notification nowhere uses the words exclusive with reference to the identity of the institutions to whom it is to be supplied nor with reference to the use thereof. 38. Undoubtedly, the intention of the legislature is to be gathered not only from the language used in a statutory provision but also from what has not been stated in the statute. The Apex court in Commissioner of Income Tax, Kerala v. Tara Agencies reported in 2007 (214) E.L.T. 491 (S.C.) had ruled that, the intention of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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