TaxTMI 
TaxTMI 
2018 (3) TMI 1249
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.... for reimbursement of CVD and SAD on the TBMs imported by the petitioner. The Arbitral Tribunal found the petitioner"s contention that there was no restrictive covenant proscribing the petitioner from raising such claim as "not maintainable". The Arbitral Tribunal held that in terms of Clause 11.1.1(ii) of the General Conditions of Contract (GCC) nothing extra was payable to the petitioner over and above the quoted rates.In addition, the Arbitral Tribunal has also found that the procurement of the TBMs was delayed. 2. Briefly stated, the controversy involved in the present petition arise in the following context:- 2.1 The petitioner is a joint venture entity constituted by Larsen & Toubro Limited (L&T) and Shanghai Urban Construction Group Corporation (SUCGC). The respondent (hereafter "DMRC") is a Public Sector company incorporated under the Companies Act, 1956. 2.2 DMRC issued a Notice Inviting Tender (NIT) on 04.04.2012 for inviting bids from eligible bidders for execution of the works entailing "Design and Construction of Tunnel from end of underground ramp (near Shankar Vihar Metro Station) to Hauz Khas Metro Station and Underground ramp near Shankar Vihar Metro Stati....
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....toms duties. 2.12 The petitioner claimed that it had encountered huge quantities of excavation in a rocky terrain, which could not be reasonably anticipated. It is also claimed that at the material time, a TBM which could cater to excavation in a rocky terrain was not available and, therefore, the petitioner was compelled to import another TBM (that is, CREG TBM). 2.13 The petitioner claims that in April 2015 it paid an amount of Rs. 3,98,85,358/- as CVD and SAD on the import of CREG TBM and its parts. The petitioner also made a claim for reimbursement of the said amount from DMRC vide its letter dated 11.04.2015. 2.14 On 08.07.2015, the petitioner once again sent a letter to DMRC demanding reimbursement of the CVD and SAD, aggregating a sum of Rs. 8,90,38,752/-, paid on the import of the two TBMs (TBM THI-02 and CREG TBM). Since DMRC did not accede to the said demand, the petitioner issued a notice of dispute dated 30.07.2015 and the disputes were referred for conciliation. The efforts to resolve the disputes amicably could not succeed and the claims made by the petitioner were referred to the Arbitral Tribunal. The said proceedings culminated in the delivery of the impug....
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....tioner could have imported the TBMs prior to the notification and the subsequent levy of CVD and SAD is an incident of delay on the part of the petitioner, is unsustainable. Reasoning and Conclusion 5. In order to address the controversy, it would be necessary to refer to the relevant clauses - Clause 11.1.1(ii) of GCC, SCC Clause 22; 11.1.1 (a); SCC Clause 23; and Clause 11.1.3(v) - which are set out below:- "i. GCC Clause 11.1.1 (ii):- Nothing extra shall be payable over the quoted rates, notwithstanding any provision to the contrary in any law for the time being in force, save and except what is specially provided in General or Special Conditions of Contract. ii. SCC Clause 22. Clause 11.1.1 (a):- the contract price, subject to any adjustment thereto in accordance with the contract shall be inclusive (including all taxes, duties, royalties etc) including Value Added Tax (VAT) paid under Delhi VAT Act, 2005 where work is done at Delhi and Value Added Tax (VAT) paid under other state Government VAT Act if work is done in that State. SCC Clause 23 Clause 11.1.3 (v):- Change in Taxes /Duty - the Contract price shall not be ....
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....h forbids him from raising any claim due to the incident of any subsequent levies or duties, is not maintainable in view of the GCC Clause 11.1.1 (ii), according to which "Nothing extra shall be payable over and above the quoted rates, save and except what is specially provided in GCC or SCC." 9. In view of the above, the decision of the Arbitral Tribunal to reject the petitioner"s claim cannot be faulted. 10. Having stated above, it is also apposite to consider the challenge laid by the petitioner in respect to the other reasons stated by the Arbitral Tribunal for arriving at the conclusion that it did. The Arbitral Tribunal had held that the notification dated 03.02.2014 amounted to a change of duty and any claim on that count was proscribed by virtue of SCC Clause 23; 11.1.3(v). The Arbitral Tribunal had reasoned that there was nil CVD on import of TBMs at the time of submission of tenders and the subsequent notification dated 03.02.2014 only bought about a change in the rate of duty from nil to 10%. As noted above, the Arbitral Tribunal had also relied on the decision of the Supreme Court in Vazir Sultan Tobacco Co. Ltd. (supra) in support of its view. 11. The contenti....
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....efore no duty is payable, will not be regarded as "dutiable goods". It is only if payment of duty is outstanding or leviable that goods will be regarded as dutiable goods." 12. Having stated above, it is also necessary to read SCC Clause 11.1.3(v) in its context. A plain reading of the said clause indicates that it is not limited to merely change in the rates of duties. The expression "change in taxes, duties, levies" would not only take within its sweep the change in the rate of taxes, duties and levies but also any substantive change in taxes brought about as imposition of such taxes, duties and levies. The petitioner"s contention that Clause 11.1.3(v) must be read in a restrictive manner to proscribe a claim only when there is a change in the rate of the duty, is unpersuasive. The clear import of Clause 11.1.3(v) is that the DMRC would not be responsible on account of any change in duties, taxes and levies. And, imposition of customs CVD on import of TBMs is clearly a change in the levy of duties, which falls within the scope of Clause 11.1.3(v). Thus, this Court finds no infirmity with the conclusion that SCC Clause 23; 11,1,3(v) proscribes any adjustment on account of incre....