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TMI Blog2022 (3) TMI 1327X X X X Extracts X X X X X X X X Extracts X X X X ..... o micro surfacing is a criterion to decide that the roads cannot be called constructed due to this thickness.' in order-in-appeal no. 278/2009/MCH/AC/Gr.VA/2009-10 dated 21st October 2009. 2. There is not an iota of doubt that it falls to the proper officer of customs to decide on the eligibility for exemptions or concessions intended by notifications, issued under the authority of section 25 of Customs Act, 1962, to dilute the rates corresponding to the most apt description of imported goods in the First Schedule to Customs Tariff Act, 1975 but, by no means, are these gestures of magnanimity dispensed by the tax administration. Taxation, doubtlessly, is a manifestation of sovereign power and, with the responsibility for enforcement vested in the tax establishment, any erosion of the fiscal pool must be justifiably accounted for; nonetheless, there can no takers for assuming that the bedrock of purposeful eschewing of revenue is the renunciation by or frugality on the part of Revenue. Just as imposition of tax may, selectively, have detrimental impact on some sectors of the economy, the opposite effect prompts governments to resort to calibrated exemptions for influencing the dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 'micro-surfacing' of existing roads and the common parlance meaning of 'new roads' and, more particularly, the decision of the Hon'ble Supreme Court in Sarabhai M Chemicals v. Commissioner of Central Excise, Vadodara [2005 (179) ELT 3 (SC)], in Commissioner Of Central Excise, Raipur V. Hira Cement [2006 (194) ELT 257 (SC)] and in Commissioner of Central Excise, Allahabad v. Ginni Filaments Ltd [2005 (181) ELT 145 (SC)] as justification for a literal construction of the expression deployed in the impugned notification. 4. On appeal, this denial of exemption was set aside in its entirety upon concluding that the very same principle of strict interpretation of would require the acceptance of entitlement claimed in bill of entry. The competent reviewing authority, being of the opinion that an unwarrantedly liberal construct of 'a person who has been awarded a contract for the construction of roads in India' by the first appellate authority in applying the notification had the consequence of unintended benefit to the importer, directed that the said order be challenged. At this stage itself, it would be appropriate to allude to the exemption afforded to 'goods specified in List ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the same issue in relation to an exemption notification, a three-Judge Bench of this Court, stated the principle as follows: "16. We are, however, of the opinion that, on principle, the decision of this Court in Mangalore Chemicals - and in Union of India v. Wood Papers referred to therein - represents the correct view of law. The principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee - assuming that the said principle is good and sound - does not apply to the construction of an exception or an exempting provision; they have to be construed strictly. A person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision. In case of doubt or ambiguity, benefit of it must go to the State. This is for the reason explained in Mangalore Chemicals and other decisions, viz., each such exception/exemption increases the tax burden on other members of the community correspondingly. Once, of course, the provision is found applicable to him, full effect must be given to it. As observed by a Constitution Bench of this Court in Hansraj Gordhandas v. H.H. Dave tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be used in breach of the condition of exemption is built upon their determination of the permitted activity as cutting of paths to be levelled and hardened before being layered with macadam - just enough provide a ride smoother than on the cobblestoned highways of ancient Rome - with no immediate requirement of 'microsurfacing' until a few years down the line. We may make bold enough to say that such is not the intent of the said notification. In Gammon India Ltd and Others v. Commissioner of Customs (Import), Mumbai [2019 (369) ELT 918 (Tri. - Mumbai)], the Tribunal has held that '12. At the threshold, the prescribed condition of eligibility must be met. Other than departments of Government and their statutory instruments, private entities or public commercial enterprises that contract with these departments or instruments fulfil the condition. The exemption notification does not, in relation to entitling of the entities, employ the expression 'for' to qualify such entitlement. Impliedly, the entitlement arises from a contractual engagement that permits access to the exemption notification. Not unnaturally, such a contract may terminate for manifold reasons. A mutual belief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p Kumar & Company, the Hon'ble Supreme Court adjured rigid application of the contents of exemption notification. As narrated supra, the eligibility for availment of the notification at the time of import is not under challenge of Revenue and entitlement to the exemption is within the terms of the notification. The cautionary directive of the Hon'ble Supreme Court is not disharmonious with the findings of the first appellate authority. The appeal, itself, is based on apprehension of likely usage after clearance by breach of condition in notification that lies entirely within the realm of empirical evidence of actual usage for purposes not intended in the notification which has not been brought on record by Revenue in the present proceedings. The strict enforcement that is obligated by the cited decision is no less pertinent to interpretation of the stage of denial or consequent recovery, as the case may be, in the exemption notification by customs authorities. It is only upon deployment of the equipment after clearance that misuse, if any, apprehended by customs authorities can be ascertained for recovery of duty foregone. The proceedings did not even afford opportunity to the impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ast to inhabit. The burgeoning network of highways in India has been the history of upgradations; upgradation is manifest in widening and technological improvements. If the yardstick in the proposition of the appellant-Commissioner were to be judicially approved, land for man and beast would be a luxury. That interpretation by the reviewing authority also does not sit well with decision of the Hon'ble Supreme Court in re Dilip Kumar & Company. 11. It is not denied by Revenue that 'micro surfacing' is a technological advancement. It was only the reluctance to accept 'micro surfacing' of roads other than 'greenfield' additions that led to this appeal. The first appellate authority has referred to circular no. 110//4/2009-ST dated 23rd February 2009 for concluding that the arguments of the assessing authority and the adjudicating authority are in conflict inasmuch as the said circular had been relied upon in the order impugned before him while the arguments in response to the appeal of the importer was that a clarification pertaining to service tax could not be acceptable in interpreting entitlement under customs laws. It would appear to us that the reliance on such circular is not o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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