TaxTMI 
TaxTMI 
2024 (5) TMI 480
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....pellant : Mr. Sujit Ghosh, Senior Advocate with Ms. Mannat Waraich, Mr. Shubh Dixit and Ms. Ananya Goswami, Advs For the Respondent : Mr. N. Venkataraman, ASG along with Ms. Amritha Chandramouli, Mr. Rahul Vijaya Kumar, Mr. Chandrashekara Bharathi, Ms. Kushi S., and Mr. Shivshankar G.,Advs JUDGMENT YASHWANT VARMA, J. S. No. Particulars Paragraph Nos. A. PREFACE 1 - 6 B. THE FACTUAL BACKDROP 7 - 22 C. SUBMISSIONS OF ACME AND AVAADA 23 - 42 D. SUBMISSIONS OF THE RESPONDENTS 43 - 75 E. SUBMISSIONS OF JAKSON POWER PRIVATE LIMITED 76 - 79 F. SUPPLEMENTAL SUBMISSIONS OF THE PETITIONERS 80 - 84 G. THE STATUTORY SCHEME 85 - 99 H. RELATED DEVELOPMENTS 100 - 105 I. THE VALIDITY OF THE IMPUGNED INSTRUCTION 106 - 121 J. THE INTERPLAY BETWEEN SECTIONS 61 AND 65 122 - 142 K. THE ―IN RELATION TO‖ QUESTION 143-149 L. MOOWR REGULATIONS AND THE CONTEMPORANEOUS MATERIAL 150-161 M. DISTORTION OF THE LEVEL PLAYING FIELD 162-165 N. APPLICABILITY OF PURPOSIVE INTERPRETATION PRINCIPLES 166-177 O. ANCILLARY ISSUES 178-179 P. FINAL DETERMINATION &nbs....
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.... essence a direction to the Customs officials to not only refrain from granting any fresh licenses but to also review existing licenses and thus depriving the petitioners of the opportunity to explain why their licenses granted under the MOOWR Regulations were valid. 4. On a more fundamental plane, it was asserted that the impugned Instruction proceeds on a wholly incorrect and erroneous understanding of the scheme underlying Sections 61 and 65 of the Act and the MOOWR Regulations themselves, and which enables an importer to bring into India any capital goods which may then be validly housed in licensed warehouses and a manufacturing process or other operations in relation to those goods being undertaken. The petitioners contend that neither the Act nor the MOOWR Regulations can possibly be construed as excluding solar power generation from its ambit and the stand to the contrary as taken by the respondents being wholly untenable. 5. Although the writ petitions were essentially concerned with the validity of the impugned Instruction, Mr. Venkatraman, the learned ASG had submitted that bearing in mind the larger ramifications concerning solar generation by units like those of the ....
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....o that governmental entity for a period of 25 years. Undisputedly, a failure on the part of the petitioner to commission the project or to falter in its obligations to supply electricity is liable to be construed as an "Event of Default" as per Clause 10.3.1 of the PPA. 8. The MOOWR Regulations, as noticed above, came into effect from 01 October 2019. They define the scope of eligibility and its application to those who have been granted a license for a warehouse under Section 58 of the Act along with permission to undertake manufacturing or other operations in that warehouse in accordance with Section 65 of the Act. A person desirous of obtaining the aforenoted license under the MOOWR Regulations is obliged to move the Principal Commissioner or the Commissioner of Customs in accordance with Regulation 4. Regulation 3 stipulates that those regulations would apply to all units currently operating under Section 65 as well as those which may apply for grant of permission to operate in accordance with Section 65 of the Act. The grant of permission is governed by Regulation 5 and which enables the competent authority of Customs, upon due verification of the application, to accord permi....
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....ion 13 stands framed in the following words:- "13. Transfer of goods from a warehouse. - (1) A licensee shall allow transfer of warehoused goods to another warehouse or to a customs station for export, with due intimation to the bond officer on the Form for transfer of goods from a warehouse. (2) Upon intimation to the bond officer as sub-regulation (1), the licensee shall, - (i) allow removal of the goods and their loading onto the means of transport; (ii) affix a one-time-lock to the means of transport; (iii) endorse the number of the one-time-lock on the Form and retain a copy thereof; (iv) endorse the number of the one-time-lock on the transport document and retain a copy thereof; (v) take into record the removal of the goods; and (vi) cause to be delivered, copies of the retained documents to the bond officer." 11. The subject of removal of resultant goods for home consumption or for export is regulated by Regulations 14 and 15 respectively and which read as follows:- "14. Removal of resultant goods for home consumption.- (1) A licensee may remove the resultant goods from warehouse for home consumption: Provided that a bill of entry for home consumpt....
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....r other operations have been permitted under Section 65, till their consumption or clearance from the warehouse; and (c) in the case of any other goods, till the expiry of one year from the date on which the proper officer has made an order under sub-section (1) of Section 60: Provided that in the case of any goods referred to in this clause, the Principal Commissioner of Customs or Commissioner of Customs may, on sufficient cause being shown, extend the period for which the goods may remain in the warehouse, by not more than one year at a time: Provided further that where such goods are likely to deteriorate, the period referred to in the first proviso may be reduced by the Principal Commissioner of Customs or Commissioner of Customs to such shorter period as he may deem fit. (2) Where any warehoused goods specified in clause (c) of sub-section (1) remain in a warehouse beyond a period of ninety days from the date on which the proper officer has made an order under sub-section (1) of Section 60, interest shall be payable at such rate as may be fixed by the Central Government under Section 47, on the amount of duty payable at the time of clearance of the goods, for the period....
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....ting from such operations are cleared from the warehouse for home consumption, import duty shall be charged on the quantity of the warehoused goods contained in so much of the waste or refuse as has arisen from the operations carried on in relation to the goods cleared for home consumption." 14. Before we proceed further and set out the facts in greater detail, we also deem it appropriate to reproduce Section 65A which though existing on the statute book is yet to be enforced. Section 65A of the Act is reproduced hereinbelow: "65-A. Goods brought for operations in warehouse to have ordinarily paid certain taxes.-(1) Notwithstanding anything to the contrary contained in this Act or the Customs Tariff Act, 1975 (51 of 1975), the following provisions shall, with effect from such date as may be notified by the Central Government, apply to goods in relation to which any manufacturing process or other operations in terms of Section 65 may be carried out, namely- (A) the dutiable goods, which are deposited in the warehouse shall be goods on which the integrated tax under sub-section (7) and the goods and services tax compensation cess under sub-section (9), of Section 3 of the Custom....
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.... such goods in relation to which any manufacturing process or other operations in terms of Section 65 may be carried out, as may be specified in the notification, from the application of this section." 15. As per the petitioners, of equal significance are the Frequently Asked Questions[FAQs] issued by the Board seeking to explain the scope and ambit of the MOOWR Regulations. The petitioners in this respect drew our attention to those FAQs' and which explains the underlying intent of the MOOWR Regulations to be the facilitation of manufacturing activity being undertaken in a designated warehouse and the importer being enabled to bring into the country capital or non-capital goods without an upfront payment of customs duty and depositing the imported goods in the warehouse either as capital goods or as inputs for further processing. 16. Of significance are the responses framed with respect to questions 8 to 10 of the FAQs' which are extracted hereunder:- "8. Can a unit undertaking manufacture and other operations in a bonded warehouse import capital goods without payment of duty? If yes, whether only BCD or both BCD and IGST on imports is covered? For how long is duty deferment a....
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.... well as the Integrated Goods and Service Tax [IGST]. It was further stated and declared that duty, both BCD and IGST, would stand deferred till such time as the capital goods are cleared from the warehouse for home consumption. This aspect assumes added significance since supply of electricity is exempt from IGST. 18. On 20 and 26 October 2021, licenses came to be granted by the second respondent to the petitioner under the MOOWR Regulations. The terms of the license dated 20 October 2021 are reproduced hereinbelow:- "GOVERNMENT OF INDIA MINISTRY OF FINANCE, DEPTT. OF REVENUE OFFICE OF THE COMMISSIONER OF CUSTOMS, JODHPUR Hqrs.: NCR BUILDING, STATUE CIRCLE, C-SCHEME, JAIPUR-302005 Date: 20.10.2021 GRANT OF LICENSE FOR PRIVATE BONDED WAREHOUSE LICENSE UNDER SECTION 58 OF CUSTOMS ACT, 1962 WITH PERMISSION OF MOOWR UNDER SECTION 65 OF CUSTOMS ACT, 1962 GOVERNED BY THE PRIVATE WAREHOUSE LICENSING REGULATIONS, 2016 NOTIFIED BY NOTIFICATION NO. 71/2016 (N.T.) DATED 14.05.2016 AND 69/2019 DATED 01.10.2019. LICENSE NO. 08/PBW-ACME HEERGARH Plot-1/Customs Jaipur/2021 This license is hereby granted to M/s Acme Heergarh Powertech Private Limited, having registered address at P....
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....The license holder shall provide annually an all risk insurance policy, that includes natural calamities, riots, fire, theft, skilful pilferage and commercial crime, in favour of the President of India, for a sum equivalent to the amount of duty involved on the dutiable goods proposed to be stored in the warehouse at any point of time. The insurance policy will be liable under the Customs Act, 1962 to compensate this department in the event of any loss or wrong release of the bonded goods. (vii) The License holder binds himself to pay any duties, interest, fine and penalties arise/payable in respect of warehoused goods. (viii) The license holder undertakes to indemnify the Pr. Commissioner/ Commissioner of Customs from any liability arising on account of loss suffered in respect of warehoused goods due to accident, damage, deterioration, destruction or any other unnatural cause during their receipt, delivery, storage, dispatch or handling. (ix) The license holder shall appoint a person who has sufficient experience in warehousing operations and customs procedures as warehouse keeper. (x) The license would cease to be valid whenever there is change in the constitution of the....
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....ranted to licensee subject to the strict observation of terms and conditions such Instruction/regulations/orders that may be issued time to time. (Rahul Nangare) Commissioner To, M/s Acme Heergarh Powertech Private Limited (Plot No. 1), Plot No. 152, Sector 44, Gurgaon, Haryana-122002" 19. Pursuant to the aforesaid, the petitioner is also stated to have executed bonds for Plot Nos. 1 and 2 of the licensed warehouses upon deposit of INR 145,07,00,000/- and INR 25,00,000,00 insofar as Plot No.1 is concerned (totalling to INR 170.07 crores) and a corresponding amount of INR 329.93 crores being deposited for Plot No. 2. 20. Thereafter, the impugned Instruction dated 09 July 2022 came to be issued by the Board and which reads as follows:- "Instruction No.13/2022-Customs F.No.473/03/2022-LC Government of India Ministry of Finance Department of Revenue (Central Board of Indirect Taxes & Customs) ***** Room No 227-A, North Block New Delhi, July 09, 2022 To, All Pr. Chief Commissioners/Chief Commissioners, under CBIC All Pr. Directors General/Directors General, under CBIC All Pr. Commissioners/Commissioners, under CBIC Subject: Warehousing of solar power ....
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....ng deposited in a warehouse. 5. Accordingly, the undersigned is directed to convey that grant of permission, as referred in para 1 above, is not in accordance with the MOOWR 2019 provisions or principles which are the conditions prescribed by the Board in terms of section 65 of the Customs Act,1962. The permissions granted to the type of generating units referred herein above need to be immediately reviewed and the necessary follow up action taken. No further permissions in such cases should be granted in terms of section 65 of the Customs Act,1962. (Bullo Mamu) Under Secretary (LC)" 21. As is evident from a reading of paragraph 2, the Board took the view that Regulation 15 contemplates the removal of "resultant goods" upon affixation of a one-time-lock on the load compartment of the means of transport in which such goods are removed from the warehouse. The Board opined that since electricity, which may come to be cleared for home consumption, cannot possibly comply with the one-time-lock condition as imposed, it would consequently fall outside the scope of the MOOWR Regulations. As is evident from para 3 of the Instruction, it also took note of the fact that electricity as ....
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....support of the aforesaid submission, Mr. Ghosh placed reliance upon the following observations as appearing in Indian National Congress (I) vs. Institute of Social Welfare & Ors[(2002) 5 SCC 685]: "27. What distinguishes an administrative act from a quasi-judicial act is, in the case of quasi-judicial functions under the relevant law the statutory authority is required to act judicially. In other words, where law requires that an authority before arriving at a decision must make an enquiry, such a requirement of law makes the authority a quasi-judicial authority." 24. It was then contended that an authority which is vested with the power to determine questions or disputes affecting the rights of citizens is bound to act judicially. According to learned senior counsel, the obligation to act judicially would mean that the decision which is arrived at must conform to an objective standard or criterion laid down or recognized by law. As a necessary corollary, according to Mr. Ghosh, the soundness or otherwise of the determination must be capable of being tested by the same external standard. According to Mr. Ghosh, for an act to be termed as judicial, the following tests as enunciat....
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....e is levelled is given an opportunity to meet it, it may be possible for him to disprove the same. Cancellation of a licence is a serious matter as it deprives the licensee of his right to carry on business. In our opinion, the nature of the duty to determine whether the licensee has committed any breach of terms or conditions of his licence and whether for that reason the licence should be cancelled, imposes upon the authority the duty to act judicially. It necessarily follows that the authority must follow the requirements of natural justice and must give an opportunity to the licensee to meet the allegations of breaches of terms and conditions of the licence reported against him before cancelling the licence. As in the instant case, this opportunity was not given to the petitioner, it has to be held that the cancellation of his licence was invalid and void. Before concluding, we must notice the argument advanced by the learned Government Advocate that the petitioner should not be granted any relief, as he did not avail of the alternative remedy of going up in appeal against the order of the Collector. The existence of an alternative remedy is not always a bar for issuance of w....
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.... Customs not only stand restrained from granting any future licenses, they are also compelled to review existing licences based on the Instruction which had already concluded that the MOOWR Regulations would be inapplicable to solar power projects. Learned senior counsel underscored the fact that an officer of Customs is bound by the view taken and expressed by the first respondent. This, according to the learned senior counsel would inevitably lead to the cancellation of licenses held by ACME and AVAADA. Mr. Ghosh submitted that the aforesaid apprehension of ACME and AVAADA stands fortified by the issuance of the SCNs' in terms of which the Customs authorities propose to cancel the licences held by the said petitioners. Mr. Ghosh further point out that in W.P.(C) 10838/2022, the license held by the petitioner therein has in fact come to be cancelled. 28. Mr. Ghosh submitted that it is trite law that if the power exercised by an authority is quasi-judicial, the same cannot be controlled by directives. It was his submission that no authority, howsoever high it may be placed, can control or dictate the decision-making function of a judicial or a quasi-judicial authority. According t....
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....ase, whether in the guise of the Circular the respondents have in fact brought out a revenue legislation for imposing excise duty. The other obvious question which arises for adjudication is whether according to the ambit and scope of Section 37B Excise Duty can be imposed? In order to properly comprehend Section 37B of the Act it is necessary to reproduce Section 37-B, which reads as under: "Instructions to Central Excise Officers. - The Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963), may, if it considers it necessary or expedient so to do for the purpose of uniformity in the classification of excisable goods or with respect to levy of duties of excise on such goods, issue such orders, Instructions and directions to the Central Excise Officers as it may deem fit, and such officers and all other persons employed in the execution of this Act shall observe and follow such orders, Instructions and directions of the said Board: Provided that no such orders, instructions or directions shall be issued- (a) so as to require any Central Excise Officer to make a particular assessment or to dispose off a particular case in a par....
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....be influenced by any directions, Instructions or the Circulars that may be issued by any other agency. Consequently, the Circular issued by the respondents cannot be permitted to interfere with the discretion of the judicial and quasi judicial authorities." 30. Yet another decision which was cited for our consideration in support of the aforenoted submission was of Varsha Plastics Pvt. Ltd. vs. Union of India[(2009) 3 SCC 365] and where the Supreme Court had observed as under: 30. The proviso to Section 151-A makes it abundantly clear that the Customs Officer who has to make a particular assessment is not bound by such orders or Instructions or directions of the Board. An assessing authority under the Act being a quasi-judicial authority has to act independently in exercise of his quasi-judicial powers and functions. Section 151-A does not in any manner control or affect the independent exercise of quasi-judicial functions by the assessing authority. 31. By the impugned Standing Order 7493 of 1999 dated 3-12-1999, the Chief Commissioner of Customs has given detailed guidelines and directions for the determination of valuation of plastic items in the light of international pric....
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....his is a case of power conferred upon one authority being really exercised by another. If a statutory authority has been vested with jurisdiction, he has to exercise it according to its own discretion. If the discretion is exercised under the direction or in compliance with some higher authority's Instruction, then it will be a case of failure to exercise discretion altogether. In other words, the discretion vested in the DSP in this case by Section 20-A(1) was not exercised by the DSP at all." 32. Yet another decision which was cited in this connection was that of Commissioner of Police, Bombay vs. Gordhandas Bhanji [1952 SCR 135] and where the Supreme Court had observed as under: " 14. The Commissioner's reply dated 3-12-1947/4-12-1947, was: "I write to inform you that permission granted to your client was cancelled under the orders of the Government who may be approached" 15. We are clear that this roundabout language would not have been used if the order of cancellation had been that of the Commissioner. We do not mean to suggest that it would have been improper for him to take into consideration the views and wishes of Government provided he did not surrender hi....
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....instruction or directive, when issued by the Board would bind officers of Customs and all other persons employed in the execution of the provisions of the Act, and they consequently being liable to observe and follow the same. The Proviso to Section 151A regulates the extent to which those instructions and directions may operate, with it being provided that those directions cannot be issued so as to require an officer of Customs to make a particular assessment or decide a case in a particular manner or to interfere with the discretion of the Commissioner of Customs (Appeals) when exercising its appellate functions. 35. According to Mr. Ghosh, the Board in terms of the impugned Instruction has taken the firm position that the MOOWR Regulations are inapplicable to generation of electricity by solar power plants. As per Mr. Ghosh, the Instruction not only embodies an unequivocal conclusion already reached by the Board with respect to the applicability of the MOOWR Regulations to solar power plants, it proceeds even further to make a declaration that past permissions and licences granted are liable to be viewed as being invalid. It is in the aforesaid backdrop that Mr. Ghosh submitted....
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....e to time will establish that the Legislature never intended to exclude any class or person or industry from its operation. Our attention was also drawn to the policy position taken by the Union Government insofar as the levy of duty on solar cells and modules is concerned. This was sought to be explained with reference to a chart which is extracted hereinbelow: ―S. No. Date/ Period Particular 1. Till FY 2019-20 Import of Solar Modules and Solar Cells was free. 2. FY 2020-21 Vide Finance Act 2020, duty on solar modules was introduced for the first time. The Section 117(b) of the Finance Act read with the Third Schedule amended the Chapter 85 (heading CTH 8541 40 11 and CTH 8541 40 12) and introduced a rate of 20% Basic Customs Duty on the import of Solar Modules and Solar Cells. 3. FY 2020-21 Although Basic Customs Duty of 20% was introduced vide Finance Act 2020, the exemption under Notification No. 24/2005 - Cus dated 01.03.2005 (as amended) still operated and exempted basic customs duty on the import of solar cells and solar modules. Entry No. 23 of the said Notification exempted all goods under Chapter Heading CTH 8541, which includes Solar Cells and Solar Mod....
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....equently the question of circumvention would not arise. 39. Mr. Ghosh then submitted that in the absence of any terminal point having been constructed in relation to capital goods being housed in a warehouse, the stand of the respondents would not sustain. Mr. Ghosh laid stress upon Section 61(1)(a) contemplating imported capital goods being duly housed in a warehouse pursuant to a license for establishment of a private warehouse having been obtained under Section 58 along with the grant of permission for carrying on "any manufacturing process or other operations" under Section 65 and the duty consequently being deferred till such time as those goods are ultimately cleared from the warehouse. 40. Learned senior counsel also laid emphasis on the distinction which Section 61 itself creates between capital goods [Section 61(1)(a)] and "any other goods" [Section 61(1)(c)] and submitted that it is only in the case of the latter that Section 61 erects a maximum time frame during which they may be warehoused. It was also contended that insofar as "any other goods" are concerned, the statute creates a maximum window of one year in explicit terms as is evident from Section 61(1)(c) of the....
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.... cells whether or not assembled in modules or panels" 30.7.2018 to 29.7.2019 25% Developed Countries + China PR + Malaysia 2 30.7.2019 to 29.1.2020 20% 3 30.1.2020 to 29.7.2020 15% 4 Note: Both solar cells & modules 3.7.2020 to 29.1.2021 14.9% Developed Countries + China PR + Vietnam +Thailand‖ 5 30.1.2021 to 29.7.2021 14.5% 44. The aforesaid submission is liable to be appreciated bearing in mind the findings which were returned by the Designated Authority (Directorate General of Trade Remedies) and which had proposed the imposition of a safeguard duty in terms of the legislative mandate of Section 8B of the 1975 Act in order to avoid serious injury to domestic industry. The learned ASG pointed out that although BCD on solar cells and modules was "Nil", they were subjected to a safeguard duty for the period 30 July 2018 to 29 July 2021. 45. The learned ASG apprised us that the Ministry of New and Renewable Energy [MNRE] thereafter issued an Office Memorandum[OM] dated 15 May 2020 proposing the introduction of a graded duty structure on solar cells....
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....r (NRE & Power), on this subject is also enclosed for reference. 3. This issues with the approval of Hon'ble Minister (NRE & Power). (Ayush Gupta) Scientist-B Email: [email protected] To: The Secretary, Department of Revenue, Ministry of Finance, North Block, New Delhi. Copy for internal circulation to: Sr. PPS to Secretary/ Sr. PPS to AS (VK)/ DS(VD)/ Sci-D (SK)" 47. The learned ASG highlighted the fact that solar power developers were abusing the MOOWR Regulations in continuing to house the imported capital goods and not clearing them for home consumption and consequently escaping the liability of 12% GST as well as 18% of the import GST in addition to BCD. MNRE along with that communication is also stated to have forwarded a representation of Indian Solar Manufacturers' Association requesting the Department of Revenue to prevent solar power producers from misusing the provisions of the MOOWR Regulations. The learned ASG submitted that it was in the aforesaid backdrop that the Board came to issue the impugned Instruction on 09 July 2022. 48. The intent of the MOOWR Regulations was explained by the learned ASG as being primarily concerned with a deferment of customs ....
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....et 2023-24 also amended CTH 9801 and various Tariff Entries under the said heading so as to exclude solar power plants and solar projects from the purview of Project Imports. Solar power plants and solar power projects also came to be consequentially removed from the residual entry of "Any other Plant and Project" as appearing in the Project Import Regulations, 1986. According to Mr. Venkataraman, the aforesaid legislative and statutory changes were carried out in order to give effect to a conscious policy decision of the Union Government to incentivize domestic manufacturing of solar cells and modules in line with the Make in India and Atma Nirbhar Bharat initiatives. 52. The learned ASG also drew our attention to the avowed objective of the Union Government of achieving a target of 500 Giga Watt[GW] by 2030 from renewable energy sources out of which 280 GW is targeted to be obtained from solar energy alone by 2030. The learned ASG also underlined the enhanced customs duty protection which has been extended to domestic manufacturers of solar cells and modules along with various other incentives which have been provided under the Performance Linked Incentive[PLI] Scheme for those ....
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....it would be apparent that while solar power production has increased by about 38 GW in the last four years, roughly 31 GW is based on imports and which thus evidences an over 80% dependence on imported solar modules required for establishment of solar power plants in India. The details pertaining to the PLI scheme relating to solar energy were also spelt out in some detail by the learned ASG. We were informed that a total integrated capacity of 8737 MW was allotted under Tranche-I of the PLI scheme and which was thereafter enhanced to 39,600 MW of domestic solar PV module manufacturing capacity under Tranche-II of the PLI Scheme. The total number of successful bidders for Tranche-I of the PLI Scheme can be gleaned from the following chart which was placed on our record: "S.No. Name of Company to whom letter of award has been issued Extent of Integration Manufacturing capacity to be installed (in MW) Eligible Capacity (for claiming PLI ) (in MW) Cumulative PLI (Rs. crore) 1 Shirdi Sai Electricals Limited Polysilicon + Ingots- Wafers+Cells +Modules 4,000 2,000 1,875 2 Reliance N....
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....y eliminating the existing price gap between imported and domestic cells and modules but also to make domestic modules more competitive as compared to imports. 59. It was in the aforesaid backdrop that the learned ASG submitted that irrespective of the outcome of the challenge to the impugned Instruction, bearing in mind the significance of the issues which arise, it would be expedient for the Court to render an authoritative determination on the scope of Section 65 read along with the MOOWR Regulations in the instant batch of petitions. This prayer stands reiterated in paragraph 16 of the Written Submissions which have been tendered. 60. Proceeding then to explain the scheme of the Act, the learned ASG advanced the following submissions. Mr. Venkataraman, at the outset, drew our attention to Section 12(1) of the Act which constitutes the charging section and contemplates the levy of customs duty at such rates as may be specified on goods imported into or exported from India. It was pointed out that the facet of levy of duty is caveated only by the expression "except as otherwise provided in this act" as that phrase appears in Section 12(1). It was thus contended that in the abse....
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....ontext otherwise requires,- xxxx xxxx xxxx (43) "warehouse" means a public warehouse licensed under Section 57 or a private warehouse licensed under Section 58 or a special warehouse licensed under Section 58-A"; (44) "warehoused goods" means goods deposited in a warehouse;" 63. The learned ASG proceeded then to Section 57 and which enables the Principal Commissioner/Commissioner of Customs to license a public warehouse wherein dutiable goods may be stored. In addition to the above, reference was also made to Section 58 which enables the Customs authorities to grant a similar license for storage of imported goods in a private warehouse. Our attention was also drawn to Section 58A which deals with licensing of special warehouses. 64. Proceeding further, the learned ASG referred to Sections 59 and 60 of the Act, which are concerned with the submission of warehousing bonds and the permission that must be obtained for removal of goods stored in a warehouse respectively. It was submitted that under the scheme of the Act, upon goods being imported into India and thus becoming chargeable to duty under Section 12, an importer has the option to either obtain clearance permission for ....
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.... merit consideration are (a) "warehoused goods" ; (b) the carrying on of "any manufacturing process or other operations" and (c) of vital significance and import being the expression "in relation to such goods". It was submitted by Mr. Venkataraman that the phrase "such goods" can only mean the "warehoused goods". Consequently, according to the learned ASG, an importer would become entitled to claim the benefit of Section 65 provided it had "warehoused goods" and had undertaken a "manufacturing process or other operations" in relation to the said "warehoused goods". The submission in essence was that it is the "warehoused goods" themselves which must undergo manufacturing or other operations and the benefit of Section 65 being attracted only in such a scenario. It was submitted that the solar panels imported into India by the writ petitioners themselves do not undergo any "manufacturing process" in the bonded warehouse. It was in the aforesaid backdrop that the learned ASG submitted that the benefit of Section 61(1)(a) would be attracted only where manufacturing operations under Section 65 are undertaken in connection with the warehoused raw materials or inputs and those being subj....
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.... a direct significance as well as an indirect significance depending on the context, see State Wakf Board v. Abdul Azeez [AIR 1968 Mad 79, 81, paras 8 and 10] , following and approving Nita Charan Bagchi v. Suresh Chandra Paul [66 Cal WN 767] , Shyam Lal v. M. Shyamlal [AIR 1933 All 649] and 76 Corpus Juris Secundum 621. Assuming that the investments in shares and in lands do not form part of the undertakings but are different subject matters, even then these would be brought within the purview of the vesting by reason of the above expressions. In this connection reference may be made to 76 Corpus Juris Secundum at pages 620 and 621 where it is stated that the term "relate" is also defined as meaning to bring into association or connection with. It has been clearly mentioned that "relating to" has been held to be equivalent to or synonymous with as to "concerning with" and "pertaining to". The expression "pertaining to" is an expression of expansion and not of contraction." 70. Our attention in this respect was also drawn to the following observations as appearing in the judgment of the Supreme Court in Maxopp Investment Limited v. CIT, New Delhi[(2018) 15 SCC 523]:- "41. In the....
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.... control of the investee company. However, that does not appear to be a relevant factor in determining the issue at hand. Fact remains that such dividend income is non-taxable. In this scenario, if expenditure is incurred on earning the dividend income, that much of the expenditure which is attributable to the dividend income has to be disallowed and cannot be treated as business expenditure. Keeping this objective behind Section 14-A of the Act in mind, the said provision has to be interpreted, particularly, the word "in relation to the income" that does not form part of total income. Considered in this hue, the principle of apportionment of expenses comes into play as that is the principle which is engrained in Section 14-A of the Act. This is so held in Walfort Share and Stock Brokers (P) Ltd. [CIT v. Walfort Share and Stock Brokers (P) Ltd., (2010) 8 SCC 137 : (2010) 326 ITR 1] , relevant passage whereof is already reproduced above, for the sake of continuity of discussion, we would like to quote the following few lines therefrom: (SCC p. 151, paras 34 & 36) "34. ... The next phrase is, "in relation to income which does not form part of total income under this Act". It means ....
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....e view was earlier taken in the case of Dharambeer Singh Vs. State of U.P. and Ors. reported in 2004 (4) ESC 2838 (Alld.) wherein this Court has repelled the similar argument that Teaching Training Course mentioned in Rule 4 (2) (b) of 1978 Rules, is illustratative and not exhaustive, therefore, B.Ed. which is also a Training Course has to be treated equivalent to the courses mentioned in the Rules. Relevant paras 7, 8, 9, 10, 11, 12 and 13 of the said judgment is being quoted below : "7. Education qualification of the respondent No. 4 is M.Sc., B.Ed. He is graduate and has three years teaching experience. He passed B.Ed. teacher's training course. The question is whether B.Ed. teachers training certificate could be treated to be minimum qualification for appointment on the post of head master of a recognized Junior High School as envisaged by Rule 4 (2) (b) of the Rules, 1978. For better understanding of the dispute Rule 4 of the Rules, 1978 is extracted below :-- "Minimum Qualifications.--(1) The minimum qualifications for the post of assistant teacher of recognized School shall be Intermediate Examination of the Board of High School and Intermediate Education, Uttar Pra....
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....fication envisaged by Rule 4 (2) (b) of Rules, 1978. 11. It may now be considered whether B.Ed. or L.T. is equivalent to teachers training courses such as Hindustani Teaching Certificate, Junior Teaching Certificate, Certificate of Training or Basic Teaching Certificate. The expression 'such' as, explained earlier means courses of similar type. Since B.Ed. is not a course of similar type the respondent was not qualified to be appointed as head master. The submission of Shri Khare appears to be based on Government treating B.Ed. as sufficient for appointment in Basic Schools in 1998. But the submission proceeds on misapprehension. In Junior Basic Schools managed by U.P. Basic Education Board. Education is imparted from Classes 1 to V. In Senior Basic Schools education is imparted from classes VI to VIII. Service Conditions of teachers and head master of these Schools are governed by the provisions of U.P. Basic Education (Teachers) Service Rules, 1981 (in brief Rules, 1981). Rule 8 prescribes essential qualification for appointment to the post of teacher or head master. The essential teachers training qualification which has been prescribed is the same as was provided in R....
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....Ed., training courses filed writ petitions before this Court claiming that they possessed L.T./B.Ed. training certificates which was higher than B.T.C. and in any case it has to be treated to be equivalent to B.T.C. training certificate. This Court did not accept that L.T./B.Ed. training certificates were higher or equivalent to B.T.C. training certificate. In Nirmal Chandra Mishra and Ors. v. State of U.P. and Ors., 1997 (1) ESC 412, it was held that B.Ed. training course is not equivalent to B.T.C. as the State Government has not declared L.T. or B.Ed., training course to be equivalent to B.T.C. training course. I another decision in B.Ed. Berozgar Sangh, Sonnhadra and Ors Vs. State of U.P. and other, 1997 (30) ALR 737, it had been held that B.Ed. or L.T. cannot be treated to be equivalent to B.T.C. The Court further held that B.Ed. and B.T.C. are different training courses for teaching different type of children; therefore, B.Ed. is neither higher nor lower than B.T.C. It is thus, clear that neither the State Government nor the Court treated B.Ed. to be a course recognized under Rule 8 of Rules, 1981. Teachers training qualification mentioned in Rule 8 of Rules 1981 and Rule 4(2....
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....re stands further fortified from Section 65 using the expression "carry on". It was in the aforesaid backdrop that the learned ASG submitted that the clear and unequivocal intent of Section 65 is of the "warehoused goods" themselves going through a process of manufacture or other operations. It was submitted that since the solar panels and solar cells undergo no such process and are merely used for converting sunlight into solar energy, the petitioners cannot possibly claim the benefit of Section 65. It was consequently submitted that since the activities undertaken by the petitioners do not fall within the ambit of Section 65, the question of applicability of the MOOWR Regulations does not arise. 74. In summation, the learned ASG submitted that the petitioners have clearly contravened both Section 65 and MOOWR Regulations and consequently the challenge as raised should be negated. It was submitted that when tested on the anvil of the MOOWR Regulations also, the challenge and the stand as taken by the writ petitioners is liable to be rejected, bearing in mind the evident absence of a connection between the "warehoused goods" and "resultant goods". It was submitted that the Proviso....
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....alifies as manufacturing and that the petitioner is undertaking manufacturing of electricity within the warehouse using the imported capital goods, the requirements of Section 65 are satisfied. 77. Mr. Datar also questioned the correctness of the contention of the learned ASG when it was submitted that since capital goods in the present case do not undergo any manufacturing, the same would fall outside the ambit of Section 65. According to Mr. Datar, the said contention is clearly misplaced when one bears in mind that under the MOOWR Regulations, duty would be paid only upon clearance of the capital goods for home consumption and till such time that event occurs, duty stands deferred. It was submitted that neither Sections 61 and 65 nor the MOOWR Regulations prescribe an outer time limit with respect to duty deferral. Emphasis was also laid on the statutory scheme not seeking to restrict the duty deferral benefit to the import of raw materials alone. It was submitted that since Section 65 uses the word "goods", it should include all kinds of goods including raw materials, capital goods, spares or even accessories. Reliance in this respect was also placed on the Circular No. 34/201....
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.... that the aforesaid phrase is synonymous with the expression "pertain to". Our attention in this respect was drawn to paras 14 -16 from the decision of the Supreme Court in Mansukhlal Dhanraj Jain v. Eknath Vithal Ogale34. "14. So far as the first condition is concerned, a comprehensive reading of the relevant averments in the plaints in both these cases leaves no room for doubt that the plaintiffs claim relief on the basis that they are licensees on monetary consideration and the defendants are the licensors. The first condition is clearly satisfied. Then remains the question whether the third condition, namely, that the suits must relate to the recovery of possession of immovable property situated in Greater Bombay is satisfied or not. It is not in dispute that the suit properties are immovable properties situated in Greater Bombay but the controversy is around the question whether these suits relate to recovery of possession of such immovable properties. The appellants contended that these are suits for injunction simpliciter for protecting their possession from the illegal, threatened acts of the respondents/defendants. Relying on a series of decisions of this Court and the B....
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....t of' or 'in connection with' or 'in relation to' or 'in consequence of' or 'concerning' or 'relating to' the contract are of the widest amplitude and content and include even questions as to the existence, validity and effect (scope) of the arbitration agreement. 15. In Doypack Systems (P) Ltd. v. Union of India [(1988) 2 SCC 299], another Division Bench of this Court consisting of Sabyasachi Mukherji (as he then was) and G.L. Oza, JJ. had an occasion to consider this very question in connection with the provisions of Sections 3 and 4 of the Swadeshi Cotton Mills Co. Ltd. (Acquisition and Transfer of Undertakings) Act, 1986. Sabyasachi Mukherji, J. speaking for the Court, has made the following pertinent observations in paras 49 and 50 of the report: (SCC p. 329) "The words 'arising out of' have been used in the sense that it comprises purchase of shares and lands from income arising out of the Kanpur undertaking. We are of the opinion that the words 'pertaining to' and 'in relation to' have the same wide meaning and have been used interchangeably for among other reasons, which may include avoidance of repetition of the same phrase in the same clause or sentence, a method foll....
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...."association with" or "relation" with the "warehoused goods". According to Mr. Ghosh, the aforesaid phrase would also extend to "manufacturing process or other operations", which may have some "concern" with the "warehoused goods". According to learned senior counsel, the aforesaid phrase cannot be conferred a restrictive meaning and must be understood as extending to a variety of situations based upon the purpose for which the input is being used. Reliance in this respect was placed on the observations appearing in para 38 of Maruti Suzuki Limited v. Commissioner of Central Excise, Delhi[(2018) 15 SCC 523]. "38. In each case it has to be established that inputs mentioned in the inclusive part are "used in or in relation to the manufacture of final product". It is the functional utility of the said item which would constitute the relevant consideration. Unless and until the said input is used in or in relation to the manufacture of final product within the factory of production, the said item would not become an eligible input. The said expression "used in or in relation to the manufacture" has many shades and would cover various situations based on the purpose for which the inpu....
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....of duty and tariff valuation of imported goods.-(1) The rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force,- (a) in the case of goods entered for home consumption under Section 46, on the date on which a bill of entry in respect of such goods is presented under that section; (b) in the case of goods cleared from a warehouse under Section 68, on the date on which a bill of entry for home consumption in respect of such goods is presented under that section; (c) in the case of any other goods, on the date of payment of duty: Provided that if a bill of entry has been presented before the date of entry inwards of the vessel or the arrival of the aircraft or the vehicle by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards or the arrival, as the case may be. (2) The provisions of this section shall not apply to baggage and goods imported by post." 87. Chapter VII of the Act pertains to clearance of imported and exported goods and for the purposes of considering the issues which stand raised, we deem it apposite to extract Sections 47 and 48 h....
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.... within thirty days after unloading.-If any goods brought into India from a place outside India are not cleared for home consumption or warehoused or transhipped within thirty days from the date of the unloading thereof at a customs station or within such further time as the proper officer may allow or if the title to any imported goods is relinquished, such goods may, after notice to the importer and with the permission of the proper officer, be sold by the person having the custody thereof: Provided that- (a) animals, perishable goods and hazardous goods, may, with the permission of the proper officer, be sold at any time; (b) arms and ammunition may be sold at such time and place and in such manner as the Central Government may direct. Explanation.-In this section, "arms" and "ammunition" have the meanings respectively assigned to them in the Arms Act, 1959 (54 of 1959)." 88. The subject of warehousing is regulated by Chapter IX of the Act and the principal provisions with which we are concerned are Sections 61 and 65. Section 61 stipulates the period for which the "warehoused goods" may be deposited in a bonded warehouse. We in this respect also deem it apposite to tak....
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....te on which notice of such cancellation is given or within such extended period as the proper officer may allow, remove the goods from such warehouse to another warehouse wherein manufacture or other operations have been permitted under Section 65, till their clearance from the warehouse; * in the case of goods other than capital goods intended for use in any hundred per cent export oriented undertaking or electronic hardware technology park unit or software technology park unit or any warehouse wherein manufacture or other operations have been permitted under Section 65, till their consumption or clearance from the warehouse; and * in the case of any other goods, till the expiry of one year from the date on which the proper officer has made an order under sub-section (1) of Section 60: Provided that in the case of any goods referred to in this clause, the Principal Commissioner of Customs or Commissioner of Customs may, on sufficient cause being shown, extend the period for which the goods may remain in the warehouse, by not more than one year at a time: Provided further that where such goods are likely to deteriorate, the period referred to in the first proviso may be....
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....rt of the interest payable under this section in respect of any warehoused goods; * by notification in the Official Gazette, specify the class of goods in respect of which no interest shall be charged under this section; * by notification in the Official Gazette, specify the class of goods in respect of which the interest shall be chargeable from the date on which the proper officer has made an order under sub- section (1) of Section 60. notification in the Official Gazette, specify the class of goods in respect of which no interest shall be charged under this section. Explanation.-For the purposes of this section, ―hundred per cent export- oriented undertaking‖ has the same meaning as in Explanation 2 to sub- section (1) of Section 3 of the Central Excises and Salt Act, 1944.‖ Explanation.-For the purposes of this section,- * ―electronic hardware technology park unit‖ means a unit established under the Electronic Hardware Technology Park Scheme notified by the Government of India; * ―hundred per cent export oriented undertaking‖ has the same meaning as in clause (ii) of Explanation 2 to sub-section (1) of Section 3 of the C....
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....the basis of risk evaluation through appropriate selection criteria: Provided further that the owner of any warehoused goods may, at any time before an order for clearance of goods for home consumption has been made in respect of such goods, relinquish his title to the goods upon payment of penalties that may be payable in respect of the goods and upon such relinquishment, he shall not be liable to pay duty thereon : Provided also that the owner of any such warehoused goods shall not be allowed to relinquish his title to such goods regarding which an offence appears to have been committed under this Act or any other law for the time being in force." 91. The MOOWR Regulations framed in terms of the powers conferred by Sections 157, 143AA read along with Section 65 came to be promulgated on 01 October 2019. The scope of those Regulations and its application is defined by Regulation 3 which reads thus: "3. Application.-These regulations shall apply to- (i) the units that operate under Section 65 of the Act, or (ii) the units applying for permission to operate under Section 65 of the Act," 92. The eligibility criteria is prescribed by Regulation 4 and which reads as follows....
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....OWR Regulations spells out the procedure to be followed once goods are received from the custom station and reads thus: "10. Receipt of goods from customs station. - (1) Upon receipt of goods at a warehouse from a customs station, the licensee shall, - (i) verify the one-time-lock affixed by the proper officer at the customs station on the load compartment of the means of transport carrying the goods to the warehouse; (ii) inform the bond officer immediately if the one-time-lock is not found intact, and refuse the unloading of the goods; (iii) allow unloading, provided the one-time-lock is found intact and verify the quantity of goods received by reconciling with the bill of entry for warehousing; (iv) report any discrepancy in the quantity of the goods within twenty-four hours to the bond officer; (v) endorse the bill of entry for warehousing with the quantity of goods received and retain a copy thereof; (vi) acknowledge the receipt of the goods by endorsing the transportation document presented by the carrier of the goods and retain a copy thereof; and (vii) take into record the goods received. (2) Upon taking into record the goods received in the warehouse, the....
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....he one-time-lock on the transport document and retain a copy thereof; (v) take into record the removal of the goods; and (vi) cause to be delivered, copies of the retained documents to the bond officer." 98. Regulations 14 and 15 of the MOOWR Regulations are concerned with the subject of removal of "resultant goods" either for home consumption or for export and are framed as follows: "14. Removal of resultant goods for home consumption. - (1) A licensee may remove the resultant goods from warehouse for home consumption: Provided that a bill of entry for home consumption has been filed in respect of the warehoused goods contained in so much of the resultant goods and the import duty, interest, fine and penalties payable, if any, in respect of such goods have been paid. (2) The licensee shall retain a copy of the bill of entry filed and take into record the goods removed." "15. Removal of resultant goods for export. - (1) A licensee shall remove the resultant goods from the warehouse for export, upon, - (i) filing a shipping bill or a bill of export, as the case may be; and (ii) affixing a one-time-lock to the load compartment of the means of transport in which such ....
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.... removal. In such a case, no duty is required to be paid in respect of the imported goods contained in the resultant product as per the provisions of section 69 of the Act. 8. To the extent that the resultant product (whether emerging out of manufacturing or other operations in the warehouse) is cleared for domestic consumption, such a transaction squarely falls within the ambit of "supply" under Section 7 of the Central Goods and Service Tax Act,2017 (hereinafter referred to as the, "CGST Act"). It would therefore be taxable in terms of section 9 of the CGST Act, 2017 or section 5 of the Integrated Goods and Services Tax Act, 2017 depending upon the supply being intra-state or inter-state. The resultant product will thus be supplied from the warehouse to the domestic tariff area under the cover of GST invoice on the payment of appropriate GST and compensation cess, if any. As regards import duties payable on the imported goods contained in so much of the resultant products are concerned, same shall be paid at the time of supply of the resultant product from the warehouse for which the licensee shall have to file an ex-bond Bill of entry and such transactions shall be duly reflec....
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....rom duty or are chargeable to nil rate of duty into a warehouse operating under section 65 has also been raised. The objective of section 65 is to enable manufacture and other operations in customs bonded warehouses. For this purpose, the units should be able to procure required raw materials, consumables, capital goods etc., imported or procured from domestic market. The goods may include dutiable goods, exempt goods or those chargeable to nil rate of duty. Denial of the facility to exempt goods or those chargeable to nil rate of duty, which may be required for manufacturing, would defeat the objective of Section 65. It is therefore clarified that imported goods, that are exempt from duty or are chargeable to nil rate of duty, may be brought into the warehouse, upon filing a bill of entry for home consumption and clearance, at the customs station of import. Such goods shall not be considered as warehoused goods in terms of section 60 of the Act. xxxx xxxx xxxx 15.1 Given the continuous nature of operations in warehouses under section 65, and the potential need to clear resultant goods expeditiously, the requirement to obtain prior permission of the proper officer for each clea....
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....Powertech Private Limited had while moving its application made the following declarations: "DESCRIPTION OF GOODS PROPOSED TO BE MANUFACTURED OR OTHER OPERATIONS PROPOSED TO BE CARRIED OUT FINAL PRODUCT Description of finished goods out o manufacturing or other operations undertaken Classification as Customs Tariff Electrical energy 2716 GOODS PROPOSED TO BE IMPORTED Description of goods Classification as Customs Tariff Capital goods required for setting up the facility Likely to be imported under Chapter 85 GOODS PROPOSED TO BE DOMESTICALLY PROCURED Description of goods HSN Classification Capital goods required for setting up the facility Likely to be procured under Chapter 32, 38, 72, 85, 90, 94 etc. BRIEF DESCRIPTION OF THE PROPOSED FACILITY The company is going to set up solar power plant with the generation capacity of around 300 MV. For this purpose, the Company shall import and procure capital goods such as solar panels, PV modules, inverters etc. required for setting up the facility. 103. As is evident from the communication dated 27 July 2022 addressed by MNRE to the Department of Revenue, the issue with respect to eligibility of solar....
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....th entry- exit checks and other criteria, thus technically satisfying the definition of a 'customs bonded warehouse', it is to be noted that these solar power projects use duty deferred solar equipment to generate electricity, which is ultimately sold in the Domestic Tariff Area (DTA). Thus, the regulation is being used for avoidance of duty incidence on imported solar equipment thus lowering the cost of setting up the solar power plant. 6. For solar PV power project developers, solar equipment required for generation of electricity, when imported to a solar PV power project having the license of 'Customs Bonded Warehouse' under MOOWR, will qualify as capital goods, for which BCD and IGST will be deferred till the time such goods remain within the Customs Bonded Warehouse. Solar Modules will remain within the Solar Power Project (Customs Bonded Warehouse) for their useful life of 25 years and generate electricity which will be supplied to DTA. Under the MOOWR scheme, no customs duty is payable on the domestic clearance of 'resultant product' per se. Duty is payable only w.r.t. 'raw materials physically contained in resultant product', which is NIL ....
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....id Regulations. Reference in this respect was also made to the Union Budget introduced for 2023-24 and in terms of which CTH 9801 also came to be amended, so as to exclude solar power plants and solar power projects from the purview of Project Imports. We were also referred to yet another amendment introduced in the Project Import Regulations, 1986, whereby the omnibus entry "Any other Plant and Project" was amended to exclude solar power plants and solar power projects and the amended omnibus entry reads as "Any other Plant and Project, other than solar power plant or solar power project" 105. All of this, according to the learned ASG, was indicative of the policy decision taken by the Union Government to incentivize domestic manufacturing of solar cells and modules and to thus give impetus to domestic industry engaged in the manufacture of solar cells and modules. The incentives extended under the PLI scheme was explained to be an extension of the aforesaid decision. However, and before we proceed to consider the merits of the submissions addressed from a policy perspective, it would be necessary to firstly examine the validity of the impugned Instruction based purely on a consi....
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....A of the Act, it is manifest that it stands confined to broad policy directives concerning the working of the Act and which alone could form the subject matter of the exercise of power. Para 2 of the impugned Instruction embodies the opinion of the Board that since electricity may also be cleared for home consumption in the course of a manufacturing process undertaken in the warehouse, it would be incapable to comply with the affixation of the one-time-lock provision contained in the MOOWR Regulations. The Board appears to have understood the scope of the MOOWR Regulations as invariably requiring the affixation of a one-time-lock at the stage when the "resultant goods" are being removed from the warehouse. The stand appears to be that since electricity cannot possibly be housed in a load compartment or be contained with the affixation of a one-time-lock, it would fall outside the scope of the MOOWR Regulations. The Board also refers to the provisions contained in Regulation 20 of the MOOWR Regulations to state that since electricity as a category of goods had not been exempted from the operation of those Regulations, the same should be viewed as being indicative of solar power gene....
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....58 or Section 58-A is cancelled, the goods warehoused shall, within seven days from the date on which order of such cancellation is served on the licensee or within such extended period as the proper officer may allow, be removed from such warehouse to another warehouse or be cleared for home consumption or export: Provided that the provisions of this Chapter shall continue to apply to the goods already deposited in the warehouse till they are removed to another warehouse or cleared for home consumption or for export, during such period." 111. Significantly, the power to cancel a license duly granted would be liable to be exercised where it is found that the licensee has either contravened any of the provisions of the Act, the rules or the regulations made thereunder, or where it is found to have breached any of the conditions of the license. The respondents cannot possibly argue that the petitioners had either contravened any provision of the Act or had acted contrary to any of the conditions as imposed or contained in the license. In fact, it was not even argued that they had in fact contravened the conditions of the license which stood granted. We therefore seriously doubt wh....
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....While dealing with the question of whether such directions could have in fact been issued, the Court had held as follows: "49. The Court next proceeds to examine if in issuing the Impugned Circular and subsequent Instructions the Respondents exceeded the scope of their authority under Section 151A of the Act. The proviso (a) to Section 151A of the Act does not permit the issuance of Instructions, orders, and directions which might require an Officer of Customs to make a particular assessment or to dispose of a particular case in a particular manner. This prohibition is not different from Section 119 of the Income Tax Act, 1961 and section 37B of the Central Excise Act, 1944. The legal position governing the above provisions of the Income-tax Act, 1961 as well as the Central Excise Act, 1944 as explained in Faridabad Iron and Steel Traders Association v. Union of India (2004) 178 ELT 1099 (Delhi) would apply to section 151A of the Act as well. The decision in Union of India v. Madras Steel Re-rollers Association (2012) 278 ELT 584 (SC) explains that the Central Board of Excise and Customs is empowered to issue circulars for the "guidance of quasi- judicial authorities". Also in Co....
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.... instant cases also, though the controversy is of different nature." 52. In UCO Bank v. CIT [1999] 237 ITR 889 (SC), it was held that (page 899 of 237 ITR): "Such circulars, however, are not meant for contradicting or nullifying any provision of the statute. They are meant for ensuring proper administration of the statute, they are designed to mitigate the rigours of the application of a particular provision of the statute in certain situations by applying a beneficial interpretation to the provision in question so as to benefit the assessee and make the application of the fiscal provision, in the present case, in consonance with the concept of income and in particular, notional income as also the treatment of such notional income under accounting practice." 53. Recently in a decision dated February 1, 2016 in Writ Petition (Civil) No. 4665 of 2014 (Allen Diesel India P. Ltd. v. Union of India [2016] 37 GSTR166 (Delhi)) this court noted that section 151A of the Act is for a very limited purpose of issuing of Instructions to officers of customs for the purpose of "uniformity in the classification of goods or with respect to the levy of duty thereon". The above provision does n....
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....across all ports. The said circular does not leave the issue of what conditions should be imposed for provisional assessment to the concerned customs officer. It requires the officer to demand 100 per cent. bank guarantee even in respect of those bills of entries which have been provisionally assessed under section 18 of the Act. It certainly is contrary to proviso (a) to section 151A inasmuch it dictates to the customs officer in what manner he should complete a provisional assessment. The consequent impugned letter dated January 22, 2016 came to be issued to M/s. J. B. Overseas only on the basis of the said circular." 115. As was succinctly explained in Bullion and Jewellers Association, the power under Section 151A is essentially concerned with ensuring uniformity in assessment practices and providing guidance to quasi-judicial authorities. However, and as the Court observed in Bullion and Jewellers Association, the scope and ambit of an exemption being claimed could not have been whittled down on the basis of an instruction issued by the Board. While coming to the aforesaid conclusion, the Court in Bullion and Jewellers Association had also noticed the decision rendered by the....
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....ver any authority is conferred with the power to determine certain questions in judicial and/or quasi judicial manner, the authority is required to exercise the power conferred upon him as per his own discretion. This is the essence of judicial and quasi judicial function. The authority exercising such powers cannot be influenced by any directions, Instructions or the Circulars that may be issued by any other agency. Consequently, the Circular issued by the respondents cannot be permitted to interfere with the discretion of the judicial and quasi judicial authorities. 96. The power to impose tax is essentially a legislative function and according to our constitutional scheme it cannot be delegated. The Excise Duty which the legislature intends to impose must be imposed directly in accordance with law. By issuing the impugned circular the respondent cannot introduce revenue legislation indirectly. The impugned circular also deserves to be quashed on this ground also. 97. Consequently, the impugned circular dated 7-9-2001 issued by the Ministry of Finance, Department of Revenue, Central Board of Excise & Customs is quashed and proceedings emanating from the said Circular also sta....
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....tion An authority entrusted with a discretion must not, in the purported exercise of its discretion, act under the dictation of another body or person..... Where a minister entertaining a planning appeal dismissed the appeal purely on the strength of policy objections entertained by another minister, it was held that his decision had to be quashed because he had, in effect, surrendered his discretion to another minister. Authorities directly entrusted with statutory discretions, be they executive officers or members of distinct tribunals, are usually entertained and are often obliged to take into considerations of public policy, and in some contexts the policy of a minister or of the Government as a whole may be a relevant factor in weighing those considerations; but this will not absolve them from their duty to exercise their personal judgment in individual cases, unless explicitly statutory provision has been made for them to be given binding instructions by a superior, or (possibly) unless the cumulative effect of the subject-matter and their hierarchical subordination (in the case of civil servants and local government officers) make it clear that it is constitutionally prop....
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....ercise of calling upon the petitioners to show cause is essentially rendered otiose and a mere formality. This, more so when the Board has already come to the definitive conclusion that solar power generation is an activity which would fall outside the ambit of Section 65 of the Act as well as the MOOWR Regulations. The Instruction thus clearly amounts to a dictate binding the licensing authority to cancel all subsisting licenses and thus falling foul of the principles noticed above. 121. Regard must also be had to the fact that the petitioner had clearly declared that they would be importing and procuring capital goods, such as solar panels PV modules, inverters etc., for setting up a solar power generation facility. It was the respondents who on due consideration of that application had proceeded to grant permissions and licenses. This was therefore clearly not a case where the petitioners had either concealed or misrepresented facts. It was therefore clearly impermissible for the Board by way of the impugned Instruction to have trampled over the power of cancellation as independently placed in the hands of the proper officer of Customs by virtue of Section 58B of the Act. The f....
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....Commr- Cus-Prev- Jodhpur 15/PBW/ACME Phalodi / Customs Jaipur/2021 dated 05.11.2021 Total Area 999.168 Acres at Village Sanwada, Tehsil- Pokaran, Dist- Jaishalmer (Raj.) 9 CUS/LIC/MISC/191/2 021- Tech-O/o Commr- Cus-Prev- Jodhpur 16/PBW/ACME Dhaulpur Plot-1/ Customs Jaipur/2021 dated 05.11.2021 Total Area 719.51 Acres at Village Sanwada, Tehsil- Pokaran, Dist- Jaishalmer (Raj.) 10 CUS/LIC/MISC/192/2 021- Tech-O/o Commr- Cus-Prev- Jodhpur 17/PBW/ACME Dhaulpur Plot-2/ Customs Jaipur/2021 dated 05.11.2021 Total Area 392.99 Acres at Village Sanwada, Tehsil- Pokaran, Dist- Jaishalmer (Raj.) 11 CUS/LIC/MISC/193/2 021- Tech-O/o Commr- Cus-Prev- Jodhpur 18/PBW/ACME Raisar Plot-1/ Customs Jaipur/2021 dated 05.11.2021 Total Area 353.16 Acres at Village Sanwada, Tehsil- Pokaran, Dist- Jaishalmer (Raj.) 12 CUS/LIC/MISC/194/2 021- Tech-O/o Commr-Cus-Prev- Jodhpur 19/PBW/ACME Raisar Plot-2/Customs Jaipur/2021 dated 05.11.2021 Total Area 341.02 Acres at Village Sanwada, Tehsil- Pokaran, Dist- Jaishalmer (Raj.) 13 CUS/LIC/MISC/195/2 021- Tech-O/o Commr- Cus-Prev- Jodhpur 20/PBW/ACME Raisar Plot-13/ Customs Ja....
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....of MOOWR 20J9 because of inability to satisfy the essence of the prescribed conditions. You are also required to state whether you would like to avail the opportunity to be heard in person, before final decision is taken. If no mention is made in the written explanation and reply, it would be presumed that you do not desire any personal hearing in the case. The SCN is clear evidence of the licensing authority having understood the Instruction as requiring it to cancel the existing license. J. THE INTERPLAY BETWEEN SECTIONS 61 AND 65 122. That then takes us to the principal question pertaining to the scheme of Sections 61 and 65 of the Act. As was noticed by us hereinabove, Section 61 enables a person to import capital or other goods and to place them in a licensed warehouse pursuant to permission that may be granted and to undertake "manufacturing process or other operations" therein. Prior to the amendments which were introduced in Section 61 by Act 28 of 2016, capital goods, "goods other than capital goods" and "any other goods" could have been placed in a warehouse for periods stipulated in that provision. In the case of capital goods, Section 61(1)(a) placed an outer time ....
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....course of manufacture or other operations. It is in that backdrop that sub-section (2) speaks of identification of the percentage of the imported goods that may be contained in the resultant goods which may be cleared for home consumption. Similar is the position which comes to the fore when one reads Regulations 14 and 15 of the MOOWR Regulations as well. Here too, the statute deals with contingencies where an importer or a licensee may remove resultant goods for home consumption. Since in the present case we are not concerned with the subject of export, Regulation 15 would clearly have no application. Regulation 14 prescribes that where a BOE for home consumption has been filed at the stage of clearance of resultant goods, the same would have to clearly indicate the ratio or the percentage of the warehoused goods which may constitute a part of the resultant goods. 125. However, Regulations 14 of the MOOWR Regulations clearly appears to cater to a situation where the resultant goods may contain or be comprised of goods which had otherwise been imported and placed in the warehouse. It does not appear to extend to a situation where the imported goods either do not form part of the ....
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....s of manufacturing activity are either forbidden or were intended to be excluded from the purview of Section 65 of the Act. At least the statute fails to construct such an embargo. 128. We are thus of the considered opinion that the mere fact that input-output ratio norms may not apply in the case of generation of electricity would not be determinative of the controversy which stands raised. This, since those norms are prescribed to take care of contingencies where a part of the imported goods get consumed in the process of manufacture. They would similarly also not be attracted in the case of manufacture of textiles or automotive parts as discussed hereinabove. The inapplicability of those factors in the case of generation of electricity, thus is neither an oddity nor can it be said to be a legislative oversight. 129. One must bear in mind that Section 61 contemplates a whole array of goods which may be imported and placed in a warehouse pursuant to permissions granted in terms of Section 65. While some may get consumed in the course of manufacture, others may not. This situation would invariably arise since the statute contemplates both capital as well as other goods being impo....
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....ng sets, machine tools, equipment and instruments for testing, research and development, quality and pollution control. Capital goods may be for use in manufacturing, mining, agriculture, aquaculture, animal husbandry, floriculture, horticulture, pisciculture, poultry, sericulture and viticulture as well as for use in services sector." 133. Rule 3(aa) of the Customs (Import of goods at Concessional Rate of Duty) Rules, 2017 defines capital goods in the following terms: " 3. Definition.- In these rules, unless the context otherwise requires,- xxxx xxxx xxxx (aa) "capital goods" means goods, the value of which is capitalised in the books of account of the importer;" 134. The said expression has also been defined under Rule 3(b) of the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 as under: "3. Definition.-(1) In these rules, unless the context otherwise requires,- xxxx xxxx xxxx b. "capital goods" means goods, the value of which is capitalized in the books of account of the importer;" 135. We also deem it apposite to extract the meaning assigned to the expression "capital goods" in P. Ramanatha Aiyar's, "The Major Law Lex....
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....s fundamentally flawed and misconceived. This submission further falters when one bears in mind the provision using the expression "manufacturing process or other operations". The phrase "other operations" is clearly intended to be expansive and thus travelling beyond the meaning that we usually ascribe to the word manufacture. When viewed alongside the phrase "in relation to", it clearly suggests the provision alluding to a capital asset which is concerned with or related to a manufacturing or other process. The argument that the provision necessarily means the imported capital good itself getting consumed in the course of manufacture, thus appears to be wholly untenable. 138. On a conjoint reading of Sections 61 and 65, we note that the statute not only contemplates the warehousing of capital goods but also those which may not fall in that category and in that sense be described as non-capital goods. It is only in the case of such goods that the period for which those may be warehoused can stretch up to the stage of their consumption and clearance from the warehouse. The aspect of consumption is one which is spoken of only in respect of goods which are non-capital in nature. The....
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....nowledged as representing the legislative intent to be the undertaking of an activity which may not necessarily answer to the attributes of manufacturing as generally understood. As observed hereinbefore, the use of that expression in fact is intended to expand the scope of the applicability of Section 65. 141. The fact that capital goods so imported were placed in a distinct category is also evident from the promotional material which appears on the "Invest India" portal as well as the 01 October 2019 Circular issued by the first respondent. As is manifest from a reading of the aforesaid circular, the first respondent had in unequivocal terms held out that units operating under Section 65 would be entitled to import capital goods without prescribing a determinate point. Similar is the position which comes to the fore when one views the FAQs which were framed and which unambiguously spoke of the duty deferment being without any time limitation. Those FAQs declared that duty on the imported capital goods would be payable only once they are cleared from the warehouse or are moved into the domestic market. This was further explained with the respondents taking the unequivocal positio....
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.... a part thereof gets subsumed in the resultant goods. 145. It becomes pertinent to note that the aforesaid submission bids us to construe the expression "in relation to" in an extremely narrow and confined sense. This, we so observe since the judgment in Doypack itself explains that phrase to be one seeking to convey comprehensiveness. After noticing various lexicons and authoritative treatises, the Supreme Court in Doypack held that the expression "in relation to" essentially seeks to bring two subjects into association or connection with each other. "Relating to" was explained as being synonymous with the expressions "concerning with" and "pertaining to". The expression "relation" had also been explained to mean "in connection with another: or "any connection, correspondence or association which can be conceived as naturally existing between things" as per the Oxford English Dictionary [The Oxford English Dictionary, Quemadero-Roaver, Clarendon Press, Oxford, Second Edition, Volume XIII (2001)]. 146. P. Ramanatha Aiyar in "The Major Law Lexicon" explains the meaning of that phrase in the following terms: "The phrase 'in relation to' is, ordinarily, of wide import, but in the ....
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....nnects the manufacturing process and the imported article. However, bearing in mind the intrinsic characteristics of capital goods, we would be unjustified in reading Section 65 as envisaging capital goods themselves undergoing a process of transformation or manufacture. As long as those goods are found to have contributed to or formed part of a process of manufacture, the qualifying criteria for the applicability of Section 65 would stand fulfilled. 149. Regard must also be had to the fact that if the provision intended that capital goods must inevitably be consumed in the process of manufacture there would have been no necessity for the amendments which were introduced in Section 61 in 2016. Similarly, Section 61 would have extended its application only to consumables, raw materials or components. It would have stopped short of provisioning for the import of capital goods which as explained above are commonly understood to be goods of continuous utility and repetitive use. L. MOOWR REGULATIONS AND THE CONTEMPORANEOUS MATERIAL 150. As was noticed by us hereinbefore, the principal argument of the respondents was that the MOOWR Regulations were never intended to extend to a situa....
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....eded further to assert that any factory could obtain a license under Section 58 of the Act as well as permission under Section 65, if they intended to import goods without an upfront payment of customs duty at the point of import. It was further held out that such an import would be permissible, leading to the goods being deposited in the bonded warehouse either as capital goods or as inputs for further processing. 154. The aforesaid response thus clearly establishes that the MOOWR Scheme was concerned with both imported goods which may be used in the course of manufacture or as inputs for further processing. This clearly demolishes the contention of the respondents that the expression "in relation to" necessitates the capital goods themselves being worked upon. 155. Query 8 pertained to a unit undertaking manufacture or other operations in a bonded warehouse and whether that unit could import capital goods without payment of duty. It also dealt with the aspect of the period for which duty would stand deferred. Answering the aforesaid, the respondents represented that in the course of imports effected by a unit licensed under Sections 58 and 65 of the Act, capital goods would be ....
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....bed to include raw materials, components, etc. It is thus manifest that the contemporaneous material and literature gave no indication of an avowed intent of the MOOWR Regulations being inapplicable to a manufacturing process which may have continued without any prescription of a maximum period for which capital goods could have been warehoused. The promotional material, the FAQs, as well as the 01 October 2019 Circular issued by the Board also did not speak of an exclusion of any particular genre of manufacturing activity or the nature of the "resultant goods" which may be produced with the aid of capital goods housed in a licensed warehouse. 161. Viewed in light of the above, we come to the firm conclusion that neither Section 61 nor Section 65 can be justifiably construed as incorporating an inherent or implied exclusion of solar power generation. The material that was placed for our consideration cannot possibly be interpreted as indicative of an intent of a particular type of self-consuming capital goods alone being intended for import. Neither the statutory provisions nor the contemporaneous material embodies an underlying policy intent for capital goods themselves being wor....
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....ights. Violations of the right to a healthy environment can reverberate across numerous rights domains, including the right to life, personal integrity, health, water, and housing, as well as procedural rights such as information, expression, association, and participation. 33. In her comprehensive study exploring climate obligations under international law, Wewerinke-Singh underscores the imperative for states to both adapt to and mitigate the impacts of climate change in alignment with human rights principles. This resonates deeply with the burgeoning recognition of the right to a healthy environment as a fundamental human right within the global discourse on environmental protection and sustainability. When discussing the right to a healthy environment, it is crucial to address access to clean and sustainable energy. Clean energy aligns with the human right to a healthy environment, as first recognized by the UN Special Rapporteur on Human Rights and the Environment in 1994. 34. Unequal energy access disproportionately affects women and girls due to their gender roles and responsibilities such as through time spent on domestic chores and unpaid care work. Women in many devel....
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....olar energy stands out as a pivotal solution in the global transition towards cleaner energy sources. Its significance lies in its capacity to significantly reduce reliance on fossil fuels, thereby curbing greenhouse gas emissions responsible for global warming and climate change. 37. India is endowed with vast solar energy potential and receives about 5,000 trillion kWh per year of solar energy, with most regions receiving 4-7 kWh per sqm per day. Solar photovoltaic power offers immense scalability in India, allowing for effective harnessing of solar energy. Moreover, solar energy facilitates distributed power generation, allowing for rapid capacity addition with short lead times. The impact of solar energy on India's energy landscape has been tangible in recent years. Decentralized and distributed solar applications have brought substantial benefits to millions of people in Indian villages, addressing their cooking, lighting, and other energy needs in an environmentally friendly manner. These initiatives have led to social and economic benefits, including reducing drudgery among rural women and girls, minimizing health risks associated with indoor air pollution, generating ....
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....oal-based fuels but also secure its energy demands in a sustainable manner. India urgently needs to shift to solar power due to three impending issues. Firstly, India is likely to account for 25% of global energy demand growth over the next two decades, necessitating a move towards solar for enhanced energy security and self-sufficiency while mitigating environmental impacts. Failure to do so may increase dependence on coal and oil, leading to economic and environmental costs. Secondly, rampant air pollution emphasizes the need for cleaner energy sources like solar to combat pollution caused by fossil fuels. Lastly, declining groundwater levels and decreasing annual rainfall underscore the importance of diversifying energy sources. Solar power, unlike coal, does not strain groundwater supplies. The extensive use of solar power plants is a crucial step towards cleaner, cheaper, and sustainable energy." 164. Undisputedly, the activities undertaken by the writ petitioners are in aid of the objective of the country transitioning towards renewable energy sources so to meet the targets of switching to a cleaner energy source. This is clearly an aspect which cannot possibly be doubted ev....
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....eads to an apparent contradiction of the underlying object of the statute. We deem it apposite to extract the following passages from the aforesaid work:- 4. REGARD TO CONSEQUENCES If the language used is capable of bearing more than one construction, in selecting the true meaning regard must be had to the consequences resulting from adopting the alternative constructions. A construction that results in hardship, serious inconvenience, injustice, absurdity or anomaly or which leads to inconsistency or uncertainty and friction in the system which the statute purports to regulate has to be rejected and preference should be given to that construction which avoids such results. This rule has no application when the words are susceptible to only one meaning and no alternative construction is reasonably open. (a) Hardship, inconvenience, injustice, absurdity and anomaly to be avoided In selecting out of different interpretations "the court will adopt that which is just, reasonable and sensible rather than that which is none of those things" as it may be presumed "that the Legislature should have used the word in that interpretation which least offends our sense of justice". If th....
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....valid today- "It is not easy to exaggerate the magnitude of this change; nevertheless, it must be admitted that, if the language of the legislature, interpreted according to the recognised canons of construction, involves this result, your lordships must frankly yield to it, even if you should be satisfied that it was not in the contemplation of the legislature." The only difference in the application of this dictum today and when it was said is that the "Recognised canons of construction" leave greater flexibility today, as will be seen below, for the use of matters outside the language of the text, where it is not clear, in order to discern the legislative intent. This principal effect of the rule requires to be considered in the light of the principal qualification, mentioned in the quotation from Lord Wensleydale above and considered further below. The distinction requires to be drawn between a result which appears absurd merely in the sense that it hard to believe that the legislature would have wanted it and one which is absurd in the sense that it falsifies or produces inconsistency in the legislation, so that even looking at nothing but the literal meaning of the text....
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....om modifying express legislative language. This is evident from the following passages from that seminal work:- "Qualification of rule: avoidance of absurdity, &c. The principle that the literal meaning of legislation must be applied even if it appears unjust does not prevent a construction which does more justice or appears more desirable from being preferred to an unjust or undesirable construction, where both are equally supported by the words used. As Finnemore J. said in Holmes v Bradfield R.D.C.- "The mere fact that the results of a statute may be unjust or absurd does not entitle this court to refuse to give it effect, but if there are two different interpretations of the words in an Act, the court will adopt that which is just, reasonable and sensible rather than that which is none of those things." In Stock v Frank Jones (Tipton) Ltd, the House of Lords considered the extent to which the literal meaning might be qualified for the purposes of rectifying anomaly. Lord Simon of Glaisdale said- "a court would only be justified in departing from the plain words of the statute were it satisfied that: (1) there is clear and gross balance of anomaly; (2) Parliament, the....
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....d than that a statute is to be expounded, not according to the letter, but according to the meaning and spirit of it. What is within the true meaning and spirit of the statute is as much law as what is within the very letter of it, and that which is not within the meaning and spirit, though it seems to be within the letter, is not the law, and is not the statute. That effect should be given to the object, spirit, and meaning of a statute is a rule of legal construction, but the object, spirit, and meaning must be collected from the words used in the statute. It must be such an intention as the legislature has used fit words to express." On the question of whether the law has a spirit for practical purposes, the exception proves the rule: in the case of taxing enactments the determination of the courts not to permit themselves to prefer the apparent underlying intention of an enactment to its letter is often forcibly contrasted by the courts with the greater latitude that they might permit themselves in other contexts. As Lord Reid said - "It is sometimes said that we should apply the spirit and not the letter of the law so as to bring in cases which, though not within the lette....
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.... primary ordinary sense, unless this stultifies the purpose of the statute, or otherwise produces some injustice, absurdity, anomaly or contradiction, in which case some secondary ordinary sense may be preferred...' The question whether words like 'absurdity', 'anomaly' and 'contradiction' are helpful in this context is best considered after the propositions embodied in the above quotations have been illustrated. Certainly, purposive construction most frequently requires giving effect to the ordinary and primary meaning of the words used, since the drafter has chosen them with care to give effect to the purpose for which the legislation is passed. It is only in exceptional cases that a purposive construction requires the judge to seek out a secondary meaning. There is much to be said for the view that there is no radical discontinuity between primary and secondary meanings. E A Driedger has suggested that: 'the adoption of a secondary meaning is not a departure from the literal meaning; the secondary meaning is the literal meaning in the context in which the words are used: I have come to the conclusion that, except where a mistake is corrected or ....
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....tute may the judge select the construction which best suits his idea of what justice requires.' 171. In the Chapter titled "Presumption against Intending Injustice or Absurdity", Maxwell on the Interpretation of Statutes [Maxwell on the Interpretation of Statutes, P. St. J. Langan, 12th edition, 1976] explains the legal position as follows:- "Injustice A sense of the possible injustice of an interpretation ought not to induce judges to do violence to well-settled rules of construction, but it may properly lead to the selection of one rather than the other of two reasonable interpretations. Whenever the language of the legislature admits of two constructions and, if construed in one way, would lead to obvious injustice, the courts act upon the view that such a result could not have been intended, unless the intention to bring it about has been manifested in plain words. "If the court is to avoid a statutory result that flouts common sense and justice it must do so not by disregarding the statute or overriding it, but by interpreting it in accordance with the judicially presumed parliamentary concern for common sense and justice." But the possibility of injustice which leads th....
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.... co-extensive with it. An Act of Parliament is always subject to evasion in this sense, for there is no obligation not to do what the legislature has not really prohibited nor to do what it has not really commanded. It is not evading an Act to keep outside it." 174. The principles noticed hereinabove find resonance in the judgment rendered by our Supreme Court in Raghunath Rai Bareja & Anr. vs. Punjab National Bank & Ors.[(2007) 2 SCC 230]. In this case, the Supreme Court enunciated the general rules of interpretation which would apply and when purposive interpretation may be resorted to in the following terms:- "34. Similarly, in Nasiruddin v. Sita Ram Agarwal [(2003) 2 SCC 577 : AIR 2003 SC 1543] (vide SCC p. 588, para 35) this Court observed: different manner, only because of harsh consequences arising therefrom. 35. Similarly, in E. Palanisamy v. Palanisamy [(2003) 1 SCC 123] (vide SCC p. 127, para 5) this Court observed: Equitable considerations have no place where the statute contained express provisions. xxxx xxxx xxxx 37. In the present case, while equity is in favour of the respondent Bank, the law is in favour of the appellant, since we are of the opinion that th....
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....sumed to have made no mistake. The presumption is that it intended to say what it has said. Assuming there is a defect or an omission in the words used by the legislature, the court cannot correct or make up the deficiency, especially when a literal reading thereof produces an intelligible result, vide Delhi Financial Corpn. V. Rajiv Anand [(2004) 11 SCC 625]. Where the legislative intent is clear from the language, the court should give effect to it, vide Govt. of A.P. v. Road Rollers Owners Welfare Assn. [(2004) 6 SCC 210] and the court should not seek to amend the law in the garb of interpretation. xxxx xxxx xxxx 43. In other words, once we depart from the literal rule, then any number of interpretations can be put to a statutory provision, each judge having a free play to put his own interpretation as he likes. This would be destructive of judicial discipline, and also the basic principle in a democracy that it is not for the Judge to legislate as that is the task of the elected representatives of the people. Even if the literal interpretation results in hardship or inconvenience, it has to be followed (see G.P. Singh's Principles of Statutory Interpretations, 9th Edn., pp.....
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....the inequitable impact that such activity was likely to have on domestic industry and local generators. That, however, and as was observed by us in the preceding parts of this decision, is an aspect pertaining to policy and which cannot constitute a legitimate basis for the Court to reconstruct a statutory provision. The respondents essentially bid us to introduce a condition of ineligibility in the garb of statutory interpretation. It would be wholly incorrect for us to recreate or reassemble Section 65 so as to exclude a particular category of activity based upon the experience of its working or its perceived negative impact on domestic industry. 177. While and hypothetically, it may be open for the respondents to adopt appropriate remedial measures if they be of the opinion that solar power generation by virtue of permissions granted under Section 65 is negatively impacting local generators or distorts the "level playing field", this Court would clearly not be justified in deploying principles of purposive interpretation to correct that projected and asserted anomaly. O. ANCILLARY ISSUES 178. Before closing the matter, we take note of an additional issue pertaining to the dem....