TaxTMI 
TaxTMI 
2011 (5) TMI 161
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....ed in this writ petition. 3. Director General of Hydrocarbons ("DGH" for short) is the technical arm of the Ministry of Petroleum & Natural Gas, formed through a Cabinet Resolution in the year 1993. 4. As per Notification No.21/2002 dated 132002 issued by the Central Government, the DGH is empowered to issue Essentiality Certificate ("Certificate" for short) addressed to the concerned Customs Authorities on the application submitted by Exploration and Production Companies who have signed Production Sharing Contracts with the Government of India. 5. In the present case, the respondent No.7 (ONGC) is the Exploration & Production Company who has been nominated by the Government of India for exploration and develop....
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....on provisional assessment on bond and bank guarantee. 9. Thereafter, the Customs Authorities were of the opinion that the importer - petitioner No.2 is not the subcontractor evaluated by the ONGC and, therefore, the benefit of Notifications No.21/02 would not be available in respect of the imported goods. Accordingly, the Customs Authorities wrote letter to DGH and requested them to cancel the Essentiality Certificate granted on 6122010. 10. On a notice issued by DGH to ONGC, both the ONGC as also the petitioner No.1 represented that the petitioner No.2, a wholly owned subsidiary of petitioner No.1 has imported the goods for use by petitioner No. 1 in executing the petroleum project of the ONGC. 11. However, the DGH, ....
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....he DGH has cancelled the Certificate on grounds which are not within their domain. Whether the petitioner No.2 is a subcontractor of ONGC or not is not a relevant criteria for issuing the Essentiality Certificate. As noted earlier, the obligation cast upon the DGH is to ascertain as to whether the goods are actually required for petroleum operations or not. Once it is found by the DGH that the goods are required for petroleum operations, then the DGH cannot refuse to issue the Essentiality Certificate. In the present case, the DGH had issued the Certificate, but after import, purported to cancel the Certificate not on the ground that the imported goods are not required for petroleum operations, but on the ground that the benefit of the Noti....
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.... effect that the petitioner No.2 has been appointed as subcontractor does not arise at all. Consequently, cancellation of the Certificate on the ground that the importer is not the bona fide subcontractor of the ONGC cannot be sustained. 15. It is true that if the imports were made on permanent basis so as to use the imported goods not only for the approved ONGC project but also for other projects, then the benefit of the Notification would not be available. However, in the present case, the petitioner No.2 has specifically informed the Customs Authorities, by its letter dated 15122010 that the import is being made on temporary basis for the purposes of ONGC project and that the imported goods would be reexported after the ONGC op....