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2019 (11) TMI 127

..... nder CTH 84306100 or not? - N/N. 621/2002-Cus dated 01.03.2002 as amended - HELD THAT:- The issue in the present case is squarely covered by the decision of the Hon’ble Apex Court in case of M/S GAMMON INDIA LTD. VERSUS COMMISSIONER OF CUSTOMS, MUMBAI [2011 (7) TMI 17 - SUPREME COURT], where it was held that since in the instant case the language of condition No.38 in the Exemption Notification is clear and unambiguous, there is no need to resort to the interpretative process in order to determine whether the said condition is to be imparted strict or liberal construction. The issue is squarely covered against the appellants. However appellants do not dispute the same but have relied upon subsequent clarification issued by the Joint Secretary (TRU) clarifying that benefit of similar exemption notification would be admissible to the constituents of the consortium. Appeal dismissed - decided against appellant. - Customs Appeal No. 86101 of 2013 - FINAL ORDER NO. A/86983/2019 - 1-11-2019 - Mr. S.K. Mohanty, Member (Judicial) and Mr. Sanjiv Srivastava, Member (Technical) Shri Nand Kishore, Advocate, for the Appellant Shri Bhushan Kamble, Assistant Commissioner, Authorised Represe .....

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..... old within 5 years of importation subject to payment of customs duty on depreciated value subject to the conditions specified therein and that individual constituent of consortium whose names appear in the contract can import goods under the said notification. Taking note of the said clarification issued, Tribunal has in their own case vide order No A/85813/2018 dated 03.05.2019 held that they were eligible to the benefit of exemption notification. Since the issue is squarely covered by the said decision of the tribunal appeal needs to be allowed. 3.3 Arguing for the revenue learned authorized representative submitted that- The finding of the assessing authority and the appellate authority to the effect that the name of appellant do not figure in the main contract, is not in dispute. The issue in respect of the same exemption notification and the condition, has been settled by the Apex Court in case of Gammon India Ltd [2011 (269) ELT 289 (SC)]; The clarification referred to by the advocate, has been issued by JS (TRU) in respect of subsequent notification and not in respect of the same notification. The decision of the tribunal in appellants own case relying on the clarification i .....

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..... of the contract including receiving payment would be carried out exclusively through the partnerincharge but any financial commitment required by the lead partner, on behalf of the joint venture, would always be previously discussed and agreed upon by the parties. As stated above, though under agreement dated 18th September, 2000, Gammon was notified as the lead partner but agreement dated 20th December, 2000 executed between NHAI as the employer and Gammon- Atlanta JV as contractor was signed by the representatives of both the companies viz. Gammon and Atlanta, meaning thereby that so far as NHAI was concerned, for them the contractor was Gammon-Atlanta JV and not Gammon or Atlanta individually. 15. According to the adjudicating authority, it was clear from both of the said agreements that the contract of construction of roads in India was awarded to the joint venture and, therefore, Gammon was not entitled to avail of the benefit of the Exemption Notification as an independent entity. On the contrary, the Commissioner (Appeals) allowed the benefit of the Exemption Notification to the appellant on the ground that the Exemption Notification should be given a liberal interpretation .....

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..... ies jointly undertaking some commercial enterprise wherein all contributed assets and shared risks. It was observed that a joint venture could take the form of a Corporation wherein two or more persons or companies might join together. Accordingly, the appeal of NHL was allowed and it was held that it was a joint venture company in the nature of a partnership between the Indian group of companies and Singapore based company which had jointly undertaken the commercial venture by contributing assets and sharing risks. Applying the principle of lifting the corporate veil , it was held that the joint venture companies technical experience could only be the experience of the partnering companies and the technical experience of all constituents of NHL was liable to be cumulatively reckoned in the tender proceedings and any one of the constituents was competent to act on behalf of the joint venture company. Highlighting the concept of joint venture, the Court observed thus : 24. The expression joint venture is more frequently used in the United States. It connotes a legal entity in the nature of a partnership engaged in the joint undertaking of a particular transaction for mutual profit o .....

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..... it squarely falls within the ambit of the said definition of the word person . We are of the opinion that even if the stated stand on behalf of the appellant is accepted, mercifully, on stark facts at hand, it does not carry their case any further. Neither was it the case of the appellant either before the Adjudicating Authority or before the Appellate Authority or before us, nor is it suggested by the documents viz. the supply order or the bill of entry, that the import of the machine was by or on behalf of the joint venture. On the contrary, the Tribunal has recorded in its order that when questioned, learned counsel for the appellant clarified that correspondence with the supplier of goods and placement of order had been done by Gammon and not by the joint venture or on their behalf. He also admitted that payment for the machine had not been made from the joint venture account, which had been provided for the contract but from the funds of Gammon. 21. Thus, the inevitable conclusion is that import of Concrete batching plant 56 cum/hr by Gammon cannot be considered as an import by M/s. Gammon-Atlanta JV, a person who had been awarded contract for construction of the roads in Indi .....

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..... answer the reference holding as under - (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export case (supra) stands overruled. 4.4 In view of the decisions as above we are of the view that issue is squarely covered against the appellants. However appellants do not dispute the same but have relied upon subsequent clarification issued by the Joint Secretary (TRU) clarifying that benefit of similar exemption notification would be admissible to the constituents of the consortium. It is their case that on the basis of the said clarification tribunal has vide order dated 03.05.2019 extended the benefit of exemption notification to them stating as follows: The first order of the Tribunal in .....

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..... the circular is brought to the notice of the Court, the challenge by the revenue should be turned out and the revenue cannot lodge an appeal taking the ground which is contrary to the circular. 6. Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that the circular should be given effect to and not the view expressed in a decision of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. They are not binding upon the court. It is for the Court to declare what the particular provision of statute says and it is not for the Executive. Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law. 7. As noted in the order of reference the correct position vis-a-vis the observations in para 11 of Dhiren Chemical s case (supra) has been stated in K .....

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