2015 (9) TMI 1015 - AT - Customs

Appellant granted exemption under Notification No. 21/2002-Cus as contractor, not sub-contractor. Decision supported by detailed analysis.

The Tribunal found the appellant eligible for exemption under Notification No. 21/2002-Cus as they were contractors appointed by a Special Purpose Vehicle ... Benefit of Exemption – S.230 of Notification No.21/2002-Cus. – benefit of notification was rejected both by adjudicating authority as well as by LAA on ground that appellant cannot be considered as person who has been awarded contract by NHAI and they are only contractor or sub-contractor appointed by STPL(SPV/Concessionaire) - Asphalt Mixing Plant – Held that:- At per letter, it is clearly stated that pursuant to Assignment Agreement, STPL has awarded contract to appellant for roadwork – STPL has been created as Special Purpose Vehicle (SPV) as per Concession Agreement between NHAI and Govt of Malaysia by virtue of Assignment Agreement and therefore Concession Agreement of NHAI is deemed to be agreement of SPV – As SPV contract was awarded to importer by entering into EPC agreement which is clearly explained in NHAIs letter – Therefore machines imported by appellants are eligible for exemption under Sl.No.230 of Notification No.21/2003 – Impugned order set aside – Decided in favour of Assesse. Issues Involved:1. Eligibility for exemption under Notification No. 21/2002-Cus.2. Definition and status of the appellant as a contractor or sub-contractor.3. Compliance with Condition No. 40 of the notification.4. Relevance of Supreme Court judgments in similar cases.Issue-wise Detailed Analysis:1. Eligibility for exemption under Notification No. 21/2002-Cus:The appellant imported an 'Asphalt Mixing Plant Model Speco TSAP-1550FFW' and claimed exemption under Sl.No.230 of Notification No. 21/2002-Cus. The adjudicating authority and the Commissioner (Appeals) denied this exemption, stating that the appellant was not directly awarded the contract by the National Highways Authority of India (NHAI). However, the appellant argued that they were eligible for the exemption as they were contractors appointed by a Special Purpose Vehicle (SPV) created under a concession agreement between NHAI and CIDB Inventures SDN BHD (Malaysia). The Tribunal found that the appellant met the criteria for exemption as they were awarded the contract by STPL (SPV) and not merely sub-contractors.2. Definition and status of the appellant as a contractor or sub-contractor:The appellant contended that they were contractors of STPL (SPV), which was created as per the concession agreement between NHAI and CIDBI. The adjudicating authority had contradictory findings, initially recognizing the appellant as a contractor but later denying this status. The Tribunal reviewed the various agreements and concluded that the appellant was indeed a contractor appointed by the SPV, not a sub-contractor, thus eligible for the exemption.3. Compliance with Condition No. 40 of the notification:The Revenue argued that the appellant did not fulfill Condition No. 40, which requires the importer to be named as a sub-contractor in the contract for road construction and to provide an undertaking not to sell or dispose of the imported goods for five years. The Tribunal found that the appellant complied with these conditions, as evidenced by the concession and assignment agreements, and the recommendation letter from NHAI supporting the exemption claim.4. Relevance of Supreme Court judgments in similar cases:The Revenue cited the Supreme Court judgment in Gammon India Ltd. Vs CC Mumbai, which dealt with the definition of 'person' in the context of exemption notifications. The Tribunal distinguished this case, noting that in Gammon India, the joint venture was not recognized as a legal entity for exemption purposes. In contrast, the appellant in the present case was part of an SPV created under a formal concession agreement, making the Supreme Court's ruling inapplicable. The Tribunal also referenced a similar case involving M/s. Punj Lloyd Ltd., where the exemption was granted under similar circumstances, reinforcing the appellant's eligibility.Conclusion:The Tribunal concluded that the machines imported by the appellant were eligible for exemption under Sl.No.230 of Notification No. 21/2002-Cus. The impugned order was set aside, and the appeal was allowed. The Tribunal's decision was based on a thorough examination of the concession and assignment agreements, compliance with the notification's conditions, and relevant case law.