TaxTMI 
TaxTMI 
1999 (8) TMI 69
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....ount calculated at the rate specified in the corresponding entry in column (3) of the said Table, subject to the condition that the importer produces a certificate from an officer not below the rank of a Joint Secretary to the Government of India in the Ministry administratively concerned with the paid industrial plants or projects that the goods in question required for the said industrial plants or projects and recommending grant of the above exemption. TABLE Sl. No. Description Rate (1) (2) (3) 1. Power projects (including gas turbine power projects) Nil 2. All other industrial plants or projects falling under Heading No. 84.66 (other than power projects, including gas turbine power projects and fertilizer projects) 20 per cent ad valorem Nothing contained in this notification shall affect the exemption granted under any other notification of the Government of India for the time being in force from the duty of customs specified in the said First Schedule in respect of the goods referred to in this notification." 2.On 19-4-1985 Notification No. 133/85 was issued which reads as under : "In exercise of the powers conferred by sub-sect....
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....ral Government being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in column (2) of the Table hereto annexed and falling under Heading No. 98.01 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from so much of that portion of the duty of customs leviable thereon which is specified in the said First Schedule as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table. TABLE Sl. No. Description of goods Rate of Duty (1) (2) (3) 1. Power projects (including gas turbine power projects) of capacity 50 Mega Watts and below) 35 per cent ad valorem 2. Other power projects (including gas turbine power projects) 25 per cent ad valorem Explanation : - For the purpose of this notification, the expression `power projects (including gas turbine power projects)' shall mean such projects whose output or end-product is power, but shall not include captive power plants set up by projects engaged in activities other than power generation." 5. The notification dated 1-5-1986 has been the bone of cont....
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....or quashing of the cancellation of the earlier registration of one of the contracts and a mandamus commanding the Assistant Collector of Customs to register the other contract. At the same time, challenge was laid to the constitutional validity of amendment notification and to the validity of explanation appended to Notification No. 67/87 on the ground that both fell foul of Article 14 of the Constitution suffering from the vice of invidious discrimination. It was also submitted that it was ultra vires of the authority of the Central Government to withdraw an exemption once the power to do so was validly exercised under Section 25 of the Customs Act. The pleas raised by the respondent have found favour with the Division Bench of the High Court which has allowed the petition in its entirety granting all the reliefs sought for by the respondent. 8. It will be useful to briefly set out the conclusions arrived at by the High Court. According to the High Court, no distinction can be drawn between a power project set up for generating electricity meant for distribution generally and a power plant set up by units engaged in activities other than power generation, i.e., whose end produc....
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....d before or after clearance) as may be specified in the notification goods of any specified description from the whole or any part of duty of customs leviable thereon. " 11. The learned Senior Counsel for the appellants has submitted that Section 25 of the Customs Act has to be read along with Sections 14 and 21 of the General Clauses Act, 1897. He submitted that the very power to issue an exemption notification includes and implies power to issue such notifications from time to time as the occasion may require and also to amend, vary or rescind any exemption granted earlier. In our opinion, need for any detailed discussion on the point stands obliterated by a recent pronouncement of this Court in Kasinka Trading and Anr. v. Union of India & Anr. - 1994 (74) E.L.T. 782 (S.C.) = 1995 (1) SCC 274 wherein it has been held (vide para 21) :- "The power to grant exemption from payment of duty, additional duty etc. under the Act, as already noticed, flows from the provisions of Section 25(1) of the Act. The power to exempt includes the power to modify or withdraw the same. The liability to pay customs duty or additional duty under the Act arises when the taxable event occurs. They a....
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....ia wherein to achieve the national objective of adopting the socialist pattern of society the industries in the country were proposed to be classified into three categories of which the first category would consist of industries the future development of which will be the exclusive responsibility of the State though the division of industries into such separate categories did not imply a division into water-tight compartments; possibility of overlapping and dovetailing between industries in the private and the public sectors was not totally excluded. "Generation and distribution of electricity" was placed in Schedule "A". The resolution mentions that all new units in these industries (i.e. listed in Schedule A), save where their establishment in the private sector had already been approved would be set up only by the State Government though ordinarily there would be no bar to small privately owned units undertaking generation of power for local needs and small scale mining. In the counter-affidavit filed on behalf of the Central Government apart from referring to the said Industrial Policy Resolution, it has further been pointed out that under the Industries (Development and Regula....
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....d, such a classification does not fall foul of Article 14 of the Constitution. We have already held that the two classes in the case at hand have a well defined differentiation. There is nothing wrong in the Central Government forming an opinion that it was in public interest to grant exemption from payment of custom duty to the imports meant for power projects engaged in production of power as an end product meant for public distribution as such while denying a similar benefit to the imports referable to power plants generating electricity for captive consumption only. 15. We agree with the learned Senior Counsel for the appellants in his submission that the exemption granted by the Notification No. 133/85 related to the goods falling under the Heading No. 84.66 of the First Schedule to the Customs Tariff Act, 1975 imported into India for power projects (including gas turbine power projects) the end product whereof was electricity meant for public distribution and therefore the amendment Notification No. 306/86 dated 1-5-1986 was only clarificatory in nature. It only clarified that the full exemption from payment of customs duty as granted by the Central Government by Notificat....
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....ity granting the registration is called upon to apply its mind to the prayer for registration. The correspondence between the parties shows that further information-material in nature and having impact on acceptability of the respondent's prayer - was called for from the applicant and therefore the prayer was not ripe for consideration. In between there were drastic changes in the factual matrix. The exemption notification had stood clarified and Project Imports (Registration of Contract) Regulations, 1965 under which the application for registration was made had stood superseded by Project Imports Regulations, 1986. No fault can be found with the refusal to register the contract. We find no merit in the submission of the learned Senior Counsel for the respondent that one application for registration having been moved in respect of the two contracts and the goods forming subject matter of the two contracts being complementary to each other for the purpose of erecting the power plant, the registration of one of the contracts having been allowed, the prayer for registration of the other contract could not have been refused. Though the refusal to register the respondent's contract wit....