Case: M/S Ivrcl. Infrastructure &amp; Projects Ltd Vs. Commnr. Of Customs, Chennai

An appeal was carried by the appellant to CESTAT which set aside thereasoning on condition 38 of the notification. It held that there was in fact no Joint Venture Company formed and the Joint Venture between the appellant and M/s Shapoorji Pallonji & Company Limited was in the nature of a partnership, in which case any of the partners could import goods covered by the exemption notification. However, it agreed with the Commissioner that what had in fact been imported was not a complete plant and, therefore, it would follow that the exemption notification would not be available on this score. CESTATThe next issue is whether the goods imported and cleared under the Bill of Entry filed by IVRCL were eligible for the benefit of exemption in terms of Sr. No.217 of the Table (read with Item No.(1) in List-11) annexed to the Notification. It is settled law that an exempting provision under a taxing statute requires to be construed strictly vide Novopan India (supra) wherein the apex Court held that a person invoking an exempting provision to relieve him of tax liability must establish clearly that he is covered by the said provision and that, only in the case of doubt or ambiguity, the benefit thereof must go the State. If the goods in question satisfy the description given at Item No.(1) in List-11, it will be eligible for the exemption. The description reads :mix plant batch type with electronic controls and bag type filter arrangement 160 tons per hourThe Revenue has argued that a complete hot mix plant was not imported and that only some components thereof were imported. The appellants have contended that, barring some steel structures, all the essential components of hot mix plant were imported in terms of purchase order placed on the German supplier. We have come across two purchase orders in the file, marked as Annexures-4 and 6 of the memorandum of appeal, both identically numbered and identically dated (No.11 dated 21.7.2001). The Annexure-4/purchase order shows an amount of DM 906,574 while Annexure-6/purchase order shows an amount of DM 550,000 as the total price of what is described asmix plant (batch type) CSD 2500, CAP 160 tons per hour as per specificationsIt has been claimed by the appellants that the amount shown in Annexure-6/purchase order is the final price as settled through negotiations with the German Supplier. We have already noted that both the purchase orders are identically numbered and identically dated. Any negotiation between IVRCL and the Germany supplier should have taken place on 21.7.2001 itself. No evidence of any such negotiation is available on record. We have also come across the work order issued by IVRCL to M/s Marshall Sons & Co. (Mfg.) Ltd., Chennai. This work order gives the following description of work:of equipment supplied by Lintec vide P.O. No. SRP/CAP/11/2K1-02 dated 21.7.2001 and also supply and erection of own structures as mentioned inThe total cost of work shown in the work order is DM 356,574. We note that the amount shown in Annexure-4/purchase order is the arithmetical sum of the amounts shown in Annexure-6/purchase order and Annexure-7/work order and, further, that the description of work allotted to Marshall includes supply and erection of structures, apart from assembling of the equipments supplied by Lintec. It is clear from these facts that some of the components viz. structures for the hot mix plant were supplied by Marshall, that the amount paid to them towards cost of such components and cost of assembling of Hot Mix Plant was DM 356,574, that the amount paid by IVRCL to Lintec for the components supplied by the latter was DM 550,000 and that the total cost of the hot mix plant as erected at the project site was DM 906,574.letter to IVRCL vide Annexure-5 itself had called upon the appellants to place the necessary order with Marshall for their share of the deal of setting up hot mix plant. Only 9 containers were listed in the first annexure to that letter, which represented theThe second annexure to the letter, representing thementioned 2 containerised items besides structural parts. The documentary evidence is squarely in support of thefinding that only some components of hot mix plant were imported from Germany by the appellant-company.11. Coming to the oral evidence under Section 108 of the Customs Act, we note that it was stated by Sh. P.S. Banik of Marshall that they were the Indian agents of Lintec for sale of hot mix plants in India and that, as per orders received from IVRCL, they had provided bitumen tanks and storage silo (containers with internal fabrication) and other structural fabrications for the hot mix plant in question. He also stated that the plant consisted of 11 containerised sections, of which a few were provided by Marshall. Sh. J. Bhattacharjee of Marshall stated that the components manufactured indigenously were essential for the function of the plant. Sh. S. Ramachandran of IVRCL himself admitted that the plant was not complete without addition of the indigenous items. Shri M.V.N. Rao of NHAI stated, after examining the import documents, that the complete plant had not arrived and that the imported components did not have the essential characteristics of hot mix plant. All these statements – none of them retracted or controverted – coupled with the documentary evidence would prove beyond doubt that the goods imported by IVRCL did not represent anything with essential character of a hot mix plant, let alone a complete plant, to satisfy the description at Item No. (1) of List-11 under the Notification. Therefore, we are unable to accept theargument that the imported goods should be treated as ‘hot mix plantWhat was exempted from import duty in terms of Sr. No.217 read with Item No.(1) of list 11 under the Notification was a complete hot mix plant fully described at the said Item No. (1) and not some components thereof. There can be no doubt or ambiguity with regard to the description of goods at the said Item No. (1).n appeal was carried by the appellant to CESTAT which set aside theg on condition 38 of the notification. It held that there was in fact no Joint Venture Company formed and the Joint Venture between the appellant and M/s Shapoorji Pallonji & Company Limited was in the nature of a partnership, in which case any of the partners could import goods covered by the exemption notification. However, it agreed with the Commissioner that what had in fact been imported was not a complete plant and, therefore, it would follow that the exemption notification would not be available on this score. CESTATe next issue is whether the goods imported and cleared under the Bill of Entry filed by IVRCL were eligible for the benefit of exemption in terms of Sr. No.217 of the Table (read with Item No.(1) in List-11) annexed to the Notification. It is settled law that an exempting provision under a taxing statute requires to be construed strictly vide Novopan India (supra) wherein the apex Court held that a person invoking an exempting provision to relieve him of tax liability must establish clearly that he is covered by the said provision and that, only in the case of doubt or ambiguity, the benefit thereof must go the State. If the goods in question satisfy the description given at Item No.(1) in List-11, it will be eligible for the exemption. The description reads :mix plant batch type with electronic controls and bag type filter arrangement 160 tons per houre Revenue has argued that a complete hot mix plant was not imported and that only some components thereof were imported. The appellants have contended that, barring some steel structures, all the essential components of hot mix plant were imported in terms of purchase order placed on the German supplier. We have come across two purchase orders in the file, marked as Annexures-4 and 6 of the memorandum of appeal, both identically numbered and identically dated (No.11 dated 21.7.2001). The Annexure-4/purchase order shows an amount of DM 906,574 while Annexure-6/purchase order shows an amount of DM 550,000 as the total price of what is described asmix plant (batch type) CSD 2500, CAP 160 tons per hour as per specificationst has been claimed by the appellants that the amount shown in Annexure-6/purchase order is the final price as settled through negotiations with the German Supplier. We have already noted that both the purchase orders are identically numbered and identically dated. Any negotiation between IVRCL and the Germany supplier should have taken place on 21.7.2001 itself. No evidence of any such negotiation is available on record. We have also come across the work order issued by IVRCL to M/s Marshall Sons & Co. (Mfg.) Ltd., Chennai. This work order gives the following description of work:of equipment supplied by Lintec vide P.O. No. SRP/CAP/11/2K1-02 dated 21.7.2001 and also supply and erection of own structures as mentioned ine total cost of work shown in the work order is DM 356,574. We note that the amount shown in Annexure-4/purchase order is the arithmetical sum of the amounts shown in Annexure-6/purchase order and Annexure-7/work order and, further, that the description of work allotted to Marshall includes supply and erection of structures, apart from assembling of the equipments supplied by Lintec. It is clear from these facts that some of the components viz. structures for the hot mix plant were supplied by Marshall, that the amount paid to them towards cost of such components and cost of assembling of Hot Mix Plant was DM 356,574, that the amount paid by IVRCL to Lintec for the components supplied by the latter was DM 550,000 and that the total cost of the hot mix plant as erected at the project site was DM 906,574.r to IVRCL vide Annexure-5 itself had called upon the appellants to place the necessary order with Marshall for their share of the deal of setting up hot mix plant. Only 9 containers were listed in the first annexure to that letter, which represented theThe second annexure to the letter, representing thementioned 2 containerised items besides structural parts. The documentary evidence is squarely in support of theg that only some components of hot mix plant were imported from Germany by the appellant-company.11. Coming to the oral evidence under Section 108 of the Customs Act, we note that it was stated by Sh. P.S. Banik of Marshall that they were the Indian agents of Lintec for sale of hot mix plants in India and that, as per orders received from IVRCL, they had provided bitumen tanks and storage silo (containers with internal fabrication) and other structural fabrications for the hot mix plant in question. He also stated that the plant consisted of 11 containerised sections, of which a few were provided by Marshall. Sh. J. Bhattacharjee of Marshall stated that the components manufactured indigenously were essential for the function of the plant. Sh. S. Ramachandran of IVRCL himself admitted that the plant was not complete without addition of the indigenous items. Shri M.V.N. Rao of NHAI stated, after examining the import documents, that the complete plant had not arrived and that the imported components did not have the essential characteristics of hot mix plant. All these statements – none of them retracted or controverted – coupled with the documentary evidence would prove beyond doubt that the goods imported by IVRCL did not represent anything with essential character of a hot mix plant, let alone a complete plant, to satisfy the description at Item No. (1) of List-11 under the Notification. Therefore, we are unable to accept thet that the imported goods should be treated as ‘hot mix plantt was exempted from import duty in terms of Sr. No.217 read with Item No.(1) of list 11 under the Notification was a complete hot mix plant fully described at the said Item No. (1) and not some components thereof. There can be no doubt or ambiguity with regard to the description of goods at the said Item No.

Court's reasoning:
5. It is settled law that statements made to an Officer of Customs are admissible in evidence under Section 108 of the Customs Act, 1962. This Court has held in Gulam Hussain Shaikh Chougule v. S. Reynolds, Supdt. Of Customs, Marmgoa, (2002) 1 SCC 155 , after quoting from several other judgments, that such statements are admissible in evidence. The Court has merely to scrutinize whether the admissions made were voluntarily or otherwise. In the present case, it is clear that unretracted statements made by none other than the Vice President of the appellant company, representatives of Marshalls, and a representative of National Highways Authority of India, having never been retracted later, were made voluntarily. Reliance on the said statements, therefore, by the authorities below cannot be said to be unwarranted in law. Shri Lakshmikumaran in a written submission has accepted that statements given under Section 108 are admissible as evidence. However, he has cited a number of authorities to the effect that when such statements are in direct conflict with documentary evidence, the latter should be given greater weight.Thus, he relied upon a letter dated 18.1.2002 written by the Vice President of the appellant to the Chief Commissioner of Customs, Chennai and another letter dated 20.1.2002 by National Highways Authority of India to the Chief Commissioner of Customs, Chennai.is clear that on a holistic reading of the said letter what has been imported isof the hot mix plant and not a complete plant as it is clear that what is manufactured indigenously would alone ultimately complete the plant.Equally the letter dated 20.1.2002 being a letter by the National Highways Authority of India does not take us much further. In fact, as has been pointed out above, Shri M.V.N. Rao of the said authority candidly admitted that a complete plant had not been imported and that the imported components did not have the essential characteristics of the hot mix plant in question. In the present case, both the oral evidence and the documentary evidence ultimately lead to the same conclusion: namely, that what was imported was not a hot mix plant that was complete in itself.It is settled law that statements made to an Officer of Customs are admissible in evidence under Section 108 of the Customs Act, 1962. This Court has held in Gulam Hussain Shaikh Chougule v. S. Reynolds, Supdt. Of Customs, Marmgoa, (2002) 1 SCC 155 , after quoting from several other judgments, that such statements are admissible in evidence. The Court has merely to scrutinize whether the admissions made were voluntarily or otherwise. In the present case, it is clear that unretracted statements made by none other than the Vice President of the appellant company, representatives of Marshalls, and a representative of National Highways Authority of India, having never been retracted later, were made voluntarily. Reliance on the said statements, therefore, by the authorities below cannot be said to be unwarranted in law. Shri Lakshmikumaran in a written submission has accepted that statements given under Section 108 are admissible as evidence. However, he has cited a number of authorities to the effect that when such statements are in direct conflict with documentary evidence, the latter should be given greater weight.Thus, he relied upon a letter dated 18.1.2002 written by the Vice President of the appellant to the Chief Commissioner of Customs, Chennai and another letter dated 20.1.2002 by National Highways Authority of India to the Chief Commissioner of Customs, Chennai.A perusal of these letters would also show that what had to be manufactured in India would alone ultimately go to make up a complete plant. This is clear from a statement made in the letter dated 18.1.2002 to the followingabove mentioned items shall be assembled in the indigenously procured steel structural container to make up the complete mixtureShri Lakshmikumaran relied upon the following statements in the saidwish to mention at this stage that the steel structures which include containers, tank and storage silo are low technology fabrications and do not form essential components/ parts to the main Hot Mix Plant systems and import of such items from Foreign Country shall unnecessarily result in outflow of valuable foreign exchange for the country.We wish to reiterate that we have not compromised with regard to importing the major essential characteristics of the plant thereby keeping the character of the hot mix planthowever, has to be read with the following statement made in the samehowever strongly feel that our company has genuinely imported the basic character of the hot mix plant as explained in detail to the concerned officer of the SIIB and are eligible for availing duty exemption as per Notification No.17 of March, 2001 as originally filed in our Bill ofis clear that on a holistic reading of the said letter what has been imported isof the hot mix plant and not a complete plant as it is clear that what is manufactured indigenously would alone ultimately complete the plant.Equally the letter dated 20.1.2002 being a letter by the National Highways Authority of India does not take us much further. In fact, as has been pointed out above, Shri M.V.N. Rao of the said authority candidly admitted that a complete plant had not been imported and that the imported components did not have the essential characteristics of the hot mix plant in question. In the present case, both the oral evidence and the documentary evidence ultimately lead to the same conclusion: namely, that what was imported was not a hot mix plant that was complete in itself.