Customs exemption for road construction machinery upheld where consortium eligibility was read with the clarified contract structure.

Customs exemption for road construction machinery was allowed where the importer was a consortium participant named in the project contract and the project was executed through a special purpose vehicle. The Tribunal applied the exemption notification in light of the 10 July 2014 clarification, which recognised that individual constituents of a consortium whose names appear in the contract may import goods under the notification. It held that the contractual requirement to form a special purpose vehicle could not defeat substantive eligibility, and that a narrow reading contrary to the clarified policy intent was unwarranted. The denial of exemption was therefore unsustainable.

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Issues: Whether a consortium partner and the special purpose vehicle formed for execution of a road construction project were entitled to claim customs exemption under the notification for road construction machinery.

Analysis: The goods were covered by the relevant entry in the exemption notification, so the dispute turned on eligibility under the condition requiring import by a person awarded a road construction contract or by a person named as a subcontractor in the contract. The Tribunal distinguished between the earlier line of decisions rendered before the governmental clarification issued on 10 July 2014 and the present case, where the clarification made it clear that individual constituents of a consortium whose names appear in the contract can import goods under the notification. The Tribunal held that the contractual structure requiring formation of a special purpose vehicle could not defeat the substantive eligibility intended by the notification, and that denying the benefit on a narrow reading would amount to disregarding the clarified policy intent.

Conclusion: The appellant satisfied the eligibility requirement for the exemption notification and the denial of exemption was unsustainable.

Ratio Decidendi: Where a notification is intended to extend exemption to entities engaged in an awarded road construction project, the eligibility condition must be applied in light of the clarified contractual structure and the policy intent, and a consortium participant cannot be denied the benefit merely because the project was executed through a special purpose vehicle.

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