TaxTMI 
TaxTMI 
2025 (6) TMI 1979
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...., Government of India. Appellant submitted an application on 25.01.2005 to 2nd respondent Software Technology Park of India with all particulars required for permission for setting up of Software Technology Park. List of capital goods to be imported for the project in terms of Notification No.153/93/Cus dated 13.08.1993 was also provided. Respondent No.2 is the nodal agency. Notification No.153/93/Cus. dated 13.08.1993 provides for exemption for imports of Telematic Infrastuctural equipments. Respondent No.1 vide letter dated 26.02.2005, acknowledged receipt of application. 2.2. Proposal for setting up Software Technology Park is required to be approved by Inter-Ministerial Standing Committee (hereinafter referred to as "IMSC") under 1st respondent. Appellant was required to submit the list of proposed capital goods to be imported and CIF value of such goods duly supported by proforma invoice. Appellant submitted all the requisite documents before 01.03.2005 as called for by 1 st respondent. Respondent noted the list of capital goods on which duty benefit had been sought, including both imported and indigenous goods and appellant was entitled to the benefit of Notification No.15....
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....i.e., 29.11.2005. 2.8. Since the representation made by appellant, was not considered by 1 st respondent, appellant approached this Court vide W.P.No.1173/2006 to treat the date of approval for setting up of Software Technology Park as 22.06.2005. This Court vide order dated 21.06.2018 directed 1 st respondent to consider the prayer of the appellant. 2.9. Appellant submitted a letter dated 02.11.2018 for considering the effective date to be the date of application or IMSC approval date, i.e., 04.04.2005 as shown in the letter dated 22.06.2005. 2.10. Respondent No.1 rejected the request of appellant stating that appellant was aware that letter dated 22.06.2005 was only a letter of intent and not a letter of permission and nevertheless went ahead to import goods. Thus, the request to modify date of approval as 25.01.2005 being the date of application for approval (or) 04.04.2005 i.e., date on which IMSC approved instead of 29.11.2005 i.e., date on which 2nd respondent issued the proceeding stood rejected. The relevant portion of the order is extracted hereunder: "...Whereas, the Committee after deliberation opined that there is no merit in changing the date of the a....
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....ated its approval only on 29.11.2005 i.e., subsequent to the import. Impugned order 14.12.2018 and the order of learned Judge found that imports were made by appellant on 24.10.2005 fully aware that Letter of Permission (LoP) is yet to be issued and thus not entitled to exemption. The impugned order dated 14.12.2018 and order of the learned Judge do not warrant interference. 6. Analysis: Against the above background question which arises is whether grant of approval by CMDA dated 21.10.2005, communicated on 29.11.2005 would prove fatal to appellant's entitlement to claim the benefit of exemption vide notification No.153 of 1993, in respect of imports made prior there to i.e., 24.10.2005. 6.1. To resolve the above controversy, it may be necessary to refer to notification No.153 of 1993 dated 13.08.1993. The relevant portions of which read as under: "Telematic infrastructural equipments imported for being used for the export of software under the Software Technology Parks 100% EOS: In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in th....
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....he conditions as may be specified by the Department of Electronics, and to pay on demand an amount equal to the duty leviable on the said goods as are not proved to the satisfaction of the Assistant Collector to have been used for the purposes for which the said goods were allowed to be imported. vii) The Collector of Customs, may subject to such conditions as may be prescribed by him, allow a unit fo re-export the said goods subject to the necessary permission being granted by the Chief Executive of the Software Technology Park. viii) The procedure as may be prescribed by the Collector of Customs is followed by such unit." 6.2. A reading of the above notification, would show that Telematic Infrastructural equipments imported into India for being used for export of software out of India under the Software Technology Parks Hundred Percent Export Oriented Scheme is exempt from the whole of the customs duty leviable thereon under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty if any leviable thereon under Section 3 of the Act. The above exemption is made subject to the conditions enumerated in clauses (1) to (8) of the said....
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....4-2009) of the Department of Commerce, Ministry of Commerce and Industry, Government of India." 6.4. Undisputed facts/position : a) Appellant had applied on 25.01.2005 for permission to import the goods in question and that was approved by IMSC, subject to approval by CMDA; b) Appellant had applied to CMDA as early as on 10.01.2005; c) IMSC approved the application during its meeting held on 04.04.2005; d) Appellant imported Telematic Infrastructural Equipment, to be used for the export of Software out of India in terms of Software Technology Park 100% Export Oriented Scheme; e) Value of import was within monetary limit mentioned in communication dated 22.06.2005 and 29.11.2005 of 1 st respondent; f) Goods imported were used for purposes mentioned in the notification; 7. Assuming that approval was granted by CMDA on 29.11.2005 and the imports were prior thereto, denial of exemption in terms of Notification No.153 of 1993 on the ground that approval of CMDA was granted subsequent to import, cannot be sustained for the following reasons: a) Ex-post facto approval - adequate compliance: 7.1. It may be necessary to....
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....ained at some stage for the purchase of shares by non-resident companies." b) Delay not attributable to appellant - No reason to deny benefit: 7.3. It is necessary to note that appellant had applied to CMDA for approval to set up STP as early as on 10.01.2005. Appellant sought permission to import items for a CIF value of Rs. 2743 Lakhs for setting up of the 1 st phase of the project. The delay of more than 10 months in granting approval by CMDA in our view cannot be a reason to deny appellant benefit of exemption in terms of notification No.153/93 dated 13.08.1993. The fact that CMDA took almost 10 months to grant its approval, cannot be a reason to deny the appellant the benefit of exemption. We say so, inasmuch as the delay cannot be attributed to appellant but to CMDA authorities in granting permission. Delay due to inter-departmental issues cannot result in denial of exemption to appellant. In this regard it may be relevant to refer to the following judgments of the Hon'ble Supreme Court: i) Commissioner. of Customs (Imports) v. Tullow India Operations Ltd. [(2005) 13 SCC 789]: 7.4. Here respondent's claim to exemption vide Notification No.20 of....
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....pplication was returned only for that purpose. The appellant filed its application for grant of essentiality certificate within two days from the date of grant of the licence with retrospective effect and then thereafter sent several reminders. The conduct of the appellant must, therefore, be judged from the factual matrix obtaining therein. We, therefore, are unable to agree with the opinion of the learned Commissioner that the appellant made any misrepresentation before this Court or that the Directorate General of Hydrocarbons had shown any favour to it. Once it is held that the Ministry of Petroleum had renewed the licence and the Directorate General of Hydrocarbons had issued the essentiality certificate, the conditions precedent for obtaining exemption in terms of the exemption notification stood fully satisfied. 15. This Court, times without number, has construed such exemption notifications in a liberal manner. [See Commr. of Customs (Imports) v. Tullow India Operations Ltd. [Commr. of Customs (Imports) v. Tullow India Operations Ltd., (2005) 13 SCC 789], Tata Iron & Steel Co. Ltd. v. State of Jharkhand [(2005) 4 SCC 272], Govt. of India v. Indian Tobacco Assn. [(2....
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....istinguished. What we have here is a pure technicality. Clause 3 of the notification leaves no discretion to the Deputy Commissioner to refuse the permission if the conditions are satisfied. The words are that he "will grant". There is no dispute that appellant had satisfied these conditions. Yet the permission was withheld - not for any valid and substantial reason but owing to certain extraneous things concerning some inter-departmental issues. Appellant had nothing to do with those issues. Appellant is now told, "We are sorry. We should have given you the permission. But now that the period is over, nothing can be done". The answer to this is in the words of Lord Denning: [ See Wells v. Minister of Housing and Local Government, (1967) 1 WLR 1000, 1007 : (1967) 2 All ER 1041] "Now I know that a public authority cannot be estopped from doing its public duty, but I do think it can be estopped from relying on a technicality and this is a technicality". 23. Francis Bennion in his Statutory Interpretation, (1984 edn.) says at page 683: "Unnecessary technicality: Modern courts seek to cut down technicalities attendant upon a statutory procedure where these cannot be s....
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....e all possible efforts to encourage such traders or manufacturers by giving such business units more benefits as contemplated under the provisions of law." (emphasis supplied) ii) Sandoz (P) Ltd. v. Union of India [(2022) 16 SCC 176] : "29. The authorities propounding the FTP were obviously conscious of the purport of the provisions of the 1944 Act and the Rules framed thereunder. Despite that, the subject policy had been propounded with the sole objective of promoting exports and earning foreign exchange. At the relevant time, the goal set forth by the policy makers was to achieve the target of at least one per cent of the global trade by promoting exports. It is thus clear that the concessions or so to say, benefits and entitlements provided under the FTP cannot be constricted by the provisions of the taxing statute of 1944 and the rules framed thereunder. To put it tersely, the dispensation provided under the 1992 Act and the FTP must operate independently and is thus mutually exclusive in this regard. Taking any other view would be counter-productive and whittle down the intent behind formulation of a liberal FTP for promoting exports." (emphasis supplie....
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....ssential to every reasonable objective of the statute' and the Court should determine whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed. 33. A fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance with an enactment is insisted, where mandatory and directory requirements are lumped together, for in such a case, if mandatory requirements are complied with, it will be proper to say that the enactment has been substantially complied with notwithstanding the non-compliance of directory requirements. In cases where substantial compliance has been found, there has been actual compliance with the statute, albeit procedurally faulty. The doctrine of substantial compliance seeks to preserve the need to comply strictly with the conditions or requirements that are important to invoke a tax or duty exemption and to forgive noncompliance for either unimportant and tangential requirements or requirements th....