TMI Blog2003 (7) TMI 749X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner No. 1 to Heit Kampt and/or Balcke Durr as ultra vires the Cess Act and the rules made thereunder. Petitioners have also prayed for quashing the demand notice dated 22.7.1991 under Rule 6 of the rules to the petitioner by respondent No. 3. They have also prayed for declaring Section 2(h) of the Act as ultra vires Articles 14 and 19(1)(g) of the Constitution and Rule 3 of the rules as ultra vires the Act. 2. We have heard learned counsel for the parties. The Petitioner No. 1 is a company incorporated under the provisions of the Companies Act having its registered office at Mathura Road, New Delhi. It is executing the works in respect of which cess under the Act is sought to be levied and collected from the Petitioner No. 1 at Vidyut Nagar, Dadri, in the State of Uttar Pradesh. It is alleged in para 2 of the petition that 70 per cent of the contract work has already been executed at Dadri in respect of which the cess is being levied. 3. The Cess Act was brought into force with effect from 1.12.1987. Section 2(d) of the Act defines 'import' as follows : (d) 'import' in relation to any technology, means the bringing into India of such technology from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... design and engineering charges equipment cost, supervision of erection and commissioning charges of foreign collaborations etc. for the project. The qualifying requirements as stipulated in the said tender invitation, inter alia, included the requirements that the 'bidder furnishes along with a bid an undertaking jointly executed by the bidder and his collaborator for successful performance of the cooling towers as per performa attached'. 7. In para 9 of the petition, it is alleged that the petitioner company together with E. Heit-Kampt of Germany and Balcke-Durr, Germany, in response to the said tender invitation submitted a bid dated 16.6.1988 to the NTPC for the said project. In para 10, it is stated that the NTPC after evaluation accepted the petitioners' bid and awarded the contract for the project, namely, supply of equipment, construction and commissioning of 4 cooling towers on turn-key basis for the Thermal Power Project at Dadri to the petitioner with Heit-Kampt and Balcke-Durr as collaborators for the said purpose, and the NTPC issued a letter of intent dated 8.11.1988 to the petitioner company, Annexure 2. Pursuant to the same, the NTPC entered into an ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minutes is Annexure 7. 9. It is alleged in para 19 of the petition that there was no import of technology within the meaning of the Cess Act. The contract was essentially, a civil contract. It is alleged in para 20 that the petitioner company executed the project as leader with Heit-Kampt and Balcke-Durr as its associates. Hence it made an application to the Reserve Bank of India by a letter dated 27.2.1989 for grant of permission for opening a letter of credit in favour of Heit-Kamp towards payment of design and consultancy charges for the project vide Annexure 8. In response to this letter, the Reserve Bank of India allowed the petitioner to open a letter of credit vide Annexure 9. The NTPC also certified to the Reserve Bank of India about the amount against IBRD Loan paid to the petitioner vide Annexure 10. 10. Subsequently, the petitioner by letter dated 18.4.1989 -- requested the Reserve Bank of India for grant of permission to open a letter of credit for DM 11,56,000 less the amount for which sanction had already been granted by the RBI. A true copy of the said letter is Annexure 11. In response to the said letter, the RBI, by letter dated 21.6.1989 informed the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd hence is liable to pay the cess. 14. In para 7 of the counter affidavit, the respondents have denied that the petitioner is doing essentially civil work. It is alleged that cooling towers are essentially plant and equipments and not civil work. 15. In para 8 of the counter affidavit, it is denied that the bid was submitted by the petitioners jointly with Heit Kampt and Balcke Durr. It is alleged that the bid was submitted by the petitioner company alone and not as a joint bidder with Heit-Kampt and Balcke Durr. It is alleged that at the time of invitation of tenders it was understood that the technology for setting up of the national draught cooling towers was not available in India ; and hence, the bidder was required to tie up with foreign collaborators for the import of technology. As per terms of the tender, the successful bidder was required to furnish a joint performance guarantee. From the contract documents, it is evident that the contract was given to the petitioner company alone and not jointly with Heit-Kampt and/or Balcke Durr, the German collaborators. An agreement dated 11.1.1990, Annexure 3 to the writ petition, was executed by the petitioner alone as contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favour by the Central Government, as is evident from para 6 of the counter affidavit. We are further of the opinion that the petitioner has imported technology. 23. No doubt, the stand of the petitioner is that it was the NTPC which imported the technology ; but we cannot accept this submission. A perusal of the contract dated 11.1.1990, Annexure 3 to the petition, shows that it was executed by the petitioner alone, and not jointly with Heit Kampt. A perusal of the said agreement shows that the contract was awarded by NTPC in favour of the petitioner and not jointly in favour of the petitioner along with its German collaborators. We, therefore, fully agree with what is stated in paras 8 and 11 of the counter affidavit. The collaboration agreement dated 22.11.1988, Annexure 4 to the petition, shows that the petitioner has imported technology from the German collaborators. It was the petitioner company and not the NTPC which required the necessary technology for executing the contract. The technology was not available in India and hence, was imported from Germany by the petitioner. 24. We do not agree with the submission made by the petitioner that Heit-Kampt and Balcke Durr w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances. By interim orders, such as the one passed in the case, the Government or concerned authority/Department often suffers heavy loss. 29. The whole misconception about interest is that, often it is regarded as a penalty or punishment. That is not so. Interest is the normal accretion on capital, as already stated above, and does not amount to a penalty. Hence, in our opinion, interest should ordinarily be ordered to be paid whenever there is delay in payment of the tax or other money liability, otherwise, the petitioner who succeeds in getting an interim order from this Court really wins the case even while technically losing it (and often wins it several rimes over, as has happened in this case). 30. However, the Supreme Court in Indian Carbon Ltd. v State of Assam (1998) 1 UPTC 1 has held that interest can be charged on delayed payment of tax only if the statute has made a substantive provision in that regard. This Supreme Court decision is binding on us under Article 141 of the Constitution ; and, hence, as long as it stands we have to follow it. There is no provision in the Cess Act for payment of interest on delayed payment of the cess, and, hence, in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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