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

5. M/s. Oil and Natural Gas Corporation Limited (for shortis a Government of India Undertaking and is engaged in the business of exploration and exploitation of oil and gas on shore and off shore. With a view to find out the possibility of exploring oil/gas, they carry out seismic survey wherefor the contracts are awarded to the companies specializing therein. It conductedSeismic Surveys in Heera, South Heera and Neelam areas of the international waters of the West Coast of India in course of exploration for oil.6. M/s. Tullow India Operations Limited (for shortrespondent in Civil Appeal No. 5900 of 2004 also conducted such surveys in the Gulf of Kutch. The processes consisted of creating shock wave by means of controlled explosions which travel through the waters of the sea and the land mass beneath. The response to these waves indicates the probability of the presence of oil or gas deposits. The response to the surveys are recorded on magnetic tapes and converted to digital form and thereafter processed at the Processing Centre using software applications named Seismos. The Central Processing Centre is located on Indian territory and, these tapes in the form of cartridges are imported by the assesses who claim exemption from customs duty in terms of the aforementioned exemption notification. The same tapes were claimed to be IT softwares.7. It is not in dispute that ONGC awarded two contracts in favour of M/s. SEDCO Forex Int. Drilling Inc. to carry out the said seismic survey on or about 15.2.1999 and 9.3.1999 respectively for a consideration of US $ 13,803,600/and US $ 2,96,230/respectively. In pursuance of the said contracts, a seismic survey vessel, namely, M.V. GECO SAPHIRE was brought in India by the said contractor for carrying out seismic survey. The said seismic survey vessel carried out seismic survey during the period 22.5.1999 and 22.6.1999. The two bills of entry No. BOE No. 12443 and 9888 were filed.In reply to the aforementioned show cause notice, ONGC filed a reply wherein the technical aspect of the matter had been stated in para 4.22 thereof. It was further contended that in a seismic vessel, there is no connectivity between the ship and the mother earth while the drilling rigs/production platforms have.10. However, it is also not in dispute that ONGC had applied for grant of exemption certificate before the Directorate General of Hydrocarbons in the month of April, 1999. The said essentiality certificate, however, could not be produced before the Appropriate Authority when importation took place as the same had not thence been granted as a result whereof a provisional clearance of the said tapes was made on 6th September, 1999. The appeal thereagainst before the Tribunal came to be dismissed in December, 2003. Essentiality certificate, however, was granted in favour of ONGC on 23.6.2004.11. Tullow had also applied for grant of essentiality certificate. Whereas ONGC could not produce essentiality certificate before the Tribunal, Tullow did.12. The Tribunal rejected the contention of the importer that the said cartridges would come within the purview of expressionin the meaning of the said provision. The Tribunal, in its judgment impugned before us, despite holding that the benefit of exemption from duty on imported goods contained in the notifications should not be denied merely on the ground that the certificates were required to be produced at the time of importation only, dismissed the appeal of the ONGC on the ground that the same had not been produced even before it and allowed the appeal of Tullow and remitted the matter back to the Commissioner for his consideration as regards acceptability thereof and consequently upon the availability of the exemption and related matter.13. ONGC and the Commissioner of Customs, Mumbai are, thus, in appeal before us.

Court's reasoning:
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.