Case: Commnr. Of Customs (Imports), Mumbai Vs. M/S. Tullow India Operations Ltd

matter to the best of its abilities. It is not in dispute that the importers were, but for production of the certificate, otherwise entitled to the grant of benefit in terms of the said notification.30. The conditions referred to in Sub-section (1) of Section 25 as regard time when such certificate is to be produced would, thus, mean those which were within the control and power of the importer. If it is not within the power and control of the importer and depends upon the acts of other public functionaries, non-compliance of such condition, subject to just exception cannot be held to be a condition precedent which would disable it from obtaining the benefit therefrom for all times to come.31. It is no doubt true that the fiscal liability has to be certain. There cannot, however, be any doubt that in a case of this nature ONGC being a Government company for all intent and purport was also certain that it would get the requisite exemption, subject of course, to its fulfilling the condition of obtaining such essentiality certificate.32. There is no universal law, as was suggested by Mr. Ganguly, that fiscal liability cannot be deferred. In a statute where there is a provision for a provisional assessment and/ or provisional clearance, subject to compliance of certain conditions, such conditions may be fulfilled at a later stage, namely, at the stage of final clearance or final assessment.33. The question may be considered from another angle. The Directorate General of Hydrocarbons was indisputably aware about the existence of such exemption notification. The certificate in accordance with law has not only been granted, the same expressly refers to the exemption notification, the entry of the table, the relevant clauses applicable therefor also the bills of entries dated 22.5.1999 and 22.6.1999. Indisputably, therefore, the Directorate General of Hydrocarbons was aware of all requisite requirements necessary therefor. It may presume that the department was also aware of the provisions of the Customs Act and the consequences likely to be suffered by the importer in the event of its inability to produce the same before the Competent Authority at the time of importation. The exercise undertaken by the said department, thus, was not to end in futility. 34. In almost a similar situation, the question came up before this Court in Commissioner of Central Excise v. M.P.V. & Engg. Industries, III (2003) SLT 630=2003 (153) ELT 485 , (wherein one of us, B.P. Singh, J. was a member) which was answered stating that an assessee although was otherwise entitled to obtain the benefit of an exemption certificate, the same should not ordinarily be denied to it because of any administrative delay over which he had no say in the following words: “....In a case of this nature it is only reasonable to take the view that the benefit of exemption will accrue to a unit found to be a small-scale industrial unit from the date on which the application was made for the grant of registration certificate. Such a unit should not be deprived of the benefit to which it is otherwise entitled as a small-scale industrial unit merely because the authorities concerned took their own time in disposing of the application. We, therefore, agree with the majority view of the Tribunal and hold that the benefit of exemption under the notification in question should be extended to the respondent with effect from the date on which the application for grant of registration was made by it before the Competent Authority.” 35. The essentiality certificate, thus, must be treated to be a proof of the fact that the importers have fulfilled the conditions enabling them to obtain the benefit under the exemption notification.36. The principles as regard construction of an exemption notification are no longer res integra; whereas the eligibility clause in relation to an exemption notification is given strict meaning wherefor the notification has to be interpreted in terms of its language, once an assessee satisfies the eligibility clause, the exemption clause therein may be construed liberally. An eligibility criteria, therefore, deserves a strict construction, although construction of a condition thereof may be given a liberal meaning.37. The decision of this Court in Jindal Drilling and Indus. Ltd. (supra), relied upon by Mr. Ganguly has no application to the facts and circumstances of the instant case.38. It is true that ordinarily, the golden rule of literal interpretation must be given effect to. But it is also well-settled that where literal interpretation gives rise to an anomaly or absurdity, the same should be avoided. [See Ashok Lanka and Another v. Rishi Dixit and Others, IV (2005) SLT 614=(2005) 5 SCC 598 ; Colgate Palmolive (India) Ltd. v. MRTP Commission and Others, VI (2002) SLT 543=III (2002) CPJ 18 (SC)=(2003) 1 SCC 129 ].39. Furthermore, it is also well-settled that the Legislature always intends to avoid hardship. In a situation of this nature, the exemption notification cannot be construed in a way which would prove to be oppressive in nature. However, we do not intend to lay down a law that delay on the part of the authorities in granting such certificates would automatically enable an assessee to obtain refund. Each case has to be judged on its own facts.40. We, however, do not agree with the contention of Mr. Lakshmikumaran that by reason of a public notice issued by a Customs House situated in a State, the effect and purport of statutory notification can be taken away. In terms of Section 151A of the Customs Act, it is only the Board which may issue instructions. Even under the aforementioned provision, the Board exercises a limited power. [See Pahwa Chemicals (P) Ltd. v. Commissioner of Central Excise, New Delhi, III (2005) SLT 374=(2005) 2 SCC 720. 41. Having regard to the facts and circumstances of this case, we are of the opinion that the Tribunal has committed no illegality in remitting the matter back to the Commissioner. Civil Appeal No. 5900 of 2004 is, therefore, dismissed.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]29. Both the Customs Department and Ministry of Petroleum and Natural Gas are departments of the Central Government. The substantive provisions which were required to be complied with for the purpose of obtaining the benefits under the said exemption notification have indisputably been complied with. It is not the case of the department that the assesse has anything to do with the grant of certificate except to pursue the matter to the best of its abilities. It is not in dispute that the importers were, but for production of the certificate, otherwise entitled to the grant of benefit in terms of the said notification.30. The conditions referred to in(1) of Section 25 as regard time when such certificate is to be produced would, thus, mean those which were within the control and power of the importer. If it is not within the power and control of the importer and depends upon the acts of other public functionaries,of such condition, subject to just exception cannot be held to be a condition precedent which would disable it from obtaining the benefit therefrom for all times to come.31. It is no doubt true that the fiscal liability has to be certain. There cannot, however, be any doubt that in a case of this nature ONGC being a Government company for all intent and purport was also certain that it would get the requisite exemption, subject of course, to its fulfilling the condition of obtaining such essentiality certificate.32. There is no universal law, as was suggested by Mr. Ganguly, that fiscal liability cannot be deferred. In a statute where there is a provision for a provisional assessment and/ or provisional clearance, subject to compliance of certain conditions, such conditions may be fulfilled at a later stage, namely, at the stage of final clearance or final assessment.33. The question may be considered from another angle. The Directorate General of Hydrocarbons was indisputably aware about the existence of such exemption notification. The certificate in accordance with law has not only been granted, the same expressly refers to the exemption notification, the entry of the table, the relevant clauses applicable therefor also the bills of entries dated 22.5.1999 and 22.6.1999. Indisputably, therefore, the Directorate General of Hydrocarbons was aware of all requisite requirements necessary therefor. It may presume that the department was also aware of the provisions of the Customs Act and the consequences likely to be suffered by the importer in the event of its inability to produce the same before the Competent Authority at the time of importation. The exercise undertaken by the said department, thus, was not to end in futility.The essentiality certificate, thus, must be treated to be a proof of the fact that the importers have fulfilled the conditions enabling them to obtain the benefit under the exemption notification.36. The principles as regard construction of an exemption notification are no longer res integra; whereas the eligibility clause in relation to an exemption notification is given strict meaning wherefor the notification has to be interpreted in terms of its language, once an assessee satisfies the eligibility clause, the exemption clause therein may be construed liberally. An eligibility criteria, therefore, deserves a strict construction, although construction of a condition thereof may be given a liberal meaning.37. The decision of this Court in Jindal Drilling and Indus. Ltd. (supra), relied upon by Mr. Ganguly has no application to the facts and circumstances of the instant case.38. It is true that ordinarily, the golden rule of literal interpretation must be given effect to. But it is alsothat where literal interpretation gives rise to an anomaly or absurdity, the same should be avoided. [See Ashok Lanka and Another v. Rishi Dixit and Others, IV (2005) SLT 614=(2005) 5 SCC 598 ; Colgate Palmolive (India) Ltd. v. MRTP Commission and Others, VI (2002) SLT 543=III (2002) CPJ 18 (SC)=(2003) 1 SCC 129 ].39. Furthermore, it is alsothat the Legislature always intends to avoid hardship. In a situation of this nature, the exemption notification cannot be construed in a way which would prove to be oppressive in nature. However, we do not intend to lay down a law that delay on the part of the authorities in granting such certificates would automatically enable an assessee to obtain refund. Each case has to be judged on its own facts.40. We, however, do not agree with the contention of Mr. Lakshmikumaran that by reason of a public notice issued by a Customs House situated in a State, the effect and purport of statutory notification can be taken away. In terms of Section 151A of the Customs Act, it is only the Board which may issue instructions. Even under the aforementioned provision, the Board exercises a limited power. [See Pahwa Chemicals (P) Ltd. v. Commissioner of Central Excise, New Delhi, III (2005) SLT 374=(2005) 2 SCC 720. 41. Having regard to the facts and circumstances of this case, we are of the opinion that the Tribunal has committed no illegality in remitting the matter back to the Commissioner. Civil Appeal No. 5900 of 2004 is, therefore, dismissed.