TaxTMI 
TaxTMI 
2026 (7) TMI 109
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.... 250 million funding from ICICI Bank Ltd. (Appellant No. 2), which was part of the Asian Development Bank's (ADB) Urban Environment and Infrastructure Facility Project. Since the project was funded by ADB and approved by the Government of India, the Appellant claimed exemption with respect to the goods imported by it for its co-generation power plant under Notification No. 84/97-Cus dated 11.11.1997 as amended by Notification No. 85/99-Cus dated 06.07.1999, No. 119/99-Cus dated 02.11.1999, No. 75/2001-Cus dated 06.07.2001 and 107/2001-Cus dated 12.10.2001 (hereinafter referred to as "Notification No. 84/97"). 2. In terms of the said Notification No. 84/97, the goods imported for the project financed by the Asian Development Bank and the said project being approved by the Government of India, will be exempted from payment of BCD, CVD and SAD, on the production of a certificate from executive head of the Project Implementing Agency and countersigned by the officer not below the rank of Joint Secretary to the Government of India, in the concerned line ministry, certifying that the said goods are required for the execution of the said project. Alleging that certificate produced ....
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....aptured in the table below: Sl. No. Date Particulars 1 01.06.2004 and 11.06.2004 In order to avail the benefit of exemption notifications, the Appellant submitted true copies of Project Implementing Authority (PIA) certificates (impugned certificates) to Ministry of Urban Development (MOUD) for their countersignature as obtained from ICICI Bank through Mr. Nand Kumar (agent) and Mr. Rakesh Yadav. 2 18.06.2004 Bill of Entry No. 633917 filed for import of goods to be used for execution of the co-generation power project. 3 19.06.2004 Bill of Entry No. 634860 filed for import of goods to be used for execution of the co-generation power project. 4 31.08.2004 At the time of investigation by DGGSTI (former DGCEI), the Appellant came to know about forged certificates and paid the differential customs duty to the extent of exemption claimed of Rs. 19,25,026/-. 5 28.10.2004 Central Excise Department issued a Show Cause Notice to the Appellant, ICICI bank and other vendors on the ground that vendors has availed the ineligible exemption benefit under Notification No. 108/95- CE dated 28.08.1995 on the strength of forged certificates. 6 ....
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....e Ministry. The MOUD vide its Office Memorandum dated 22.9.2010 also confirmed that it is the Line Ministry. 15 22.09.2010 Office Memorandum issued by the MOUD seeking facilitation of the verification process from the Department of Economic Affairs for forwarding the PIACs to the Ministry. 16 25.02.2011 Appellant was informed by MOUD that certificates were not available with the Ministry and Department of Economic Affairs have already requested for the same from ICICI bank. 17 01.06.2011 The Department of Economic Affairs issued the office memorandum referring to the letter dated 25.5.2011 issued by MNRE and stating that the equipments imported by the Appellant were required in a bagasse cogeneration power plant. 18 15.07.2011 The Department of Economic Affairs requested the Ministry of Urban Development to take necessary action. 19 31.01.2012 Despite the pendency of the countersignature of the PIA certificate, the Commissioner of Central excise passed an order adjudicating the SCN and confirming the excise duty demand along with interest and penalty. 20 14.05.2012 The Appellant challenged the said order dated 31.01.2012 before ....
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....g in the impugned order, Learned Counsel for the Appellant submits that the impugned order confirming the demand along with interest and penalty are on the ground that Appellant had arranged the forgery of countersignature on the certificates issued by the Project Implementing Agency. However, there is no iota of evidence with respect to Appellants involvement in the forgery of PIAC certificate. In Appellants case, the Project Implementing Authority issued certificates signed by its Executive Director and countersigned by the Joint Secretary, Department of Economic Affairs, Ministry of Finance. The said certificates are produced before the Jurisdictional Assistant/ Deputy Commissioner at the time of clearance of the goods as prescribed under the Notification. Appellant No. 1 proceeded with claiming the benefit on a bona fide belief that the impugned certificates were genuine. 5. As regards the certificate countersigned by the concerned Line Ministry, Learned Counsel submits that the requirement is only to certify the assertion made by the Executive Head of the Project Implementing Authority. The content of the certificate is that the said goods are intended to be used in a proje....
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....oes not compel a man to do that which is impossible' as held in State of Rajasthan Vs. Shamsher Singh, 1985 AIR 1082. It is further submitted that the said Notification No. 84/97-Cus dated 11.11.1997 as amended was issued in the year 1997 and thereafter, was amended in the year 1999 and 2001, however, still there was no clarity on the aspect of who would be the Line Ministry for the project, whether it would be Ministry of Urban Development (MOUD) or Ministry of Finance (MOF). It is submitted that when there was no clarity with respect to the nominated Line Ministry at the time of importation, a fact which had been noted by the Hon'ble Allahabad High Court in its decision dated 15.10.2006, the condition of countersignatures by the Joint Secretary of Line Ministry could not have been implemented and thus, it becomes an impossible condition to be fulfilled by the Appellant. 7. Learned Counsel further submits that even if it is assumed that Mr. Nand Kumar as an agent of the Appellant and forgery committed by them is acted with his knowledge, assuming the involvement of the Appellant is beyond the scope of the agency by engaging in the act of forgery of the impugned certificates. Fr....
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....tor imported the impugned goods at Mumbai by claiming the benefit of exemption under Notification No. 84/97-Cus., dated 11.11.97, as amended by Notification No. 85/99-Cus. dated 6.7.99, No. 119/99-Cus. dated 2.11.99, No. 75/2001-Cus., dated 6.7.2001 and 107/2001Cus., dated 12.10.2001. The benefit under this Notification was admissible to all the goods imported into India and intended to be used in a project financed by the World Bank, the Asian Development Bank etc., subject to condition that the importer produces a certificate from the executive head of the Project Implementing Authority and counter signed by an officer not below the rank of Joint Secretary to the Government of India in the concerned Line Ministry, stating that the said goods are required for the execution of the said project and that this project has duly been approved by the Government of India. 2.3 Directorate of Revenue Intelligence, New Delhi ("DRI") gathered the information that Appellant 1 was claiming the benefit of this exemption from Customs duties based on forged certificates issued by Project Implementing Authority Certificates. Therefore, an inquiry and investigation was instituted in the mat....
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....his case, a Junior Finance Officer, in the Department of Economic Affairs, Ministry of Finance finds the gold mine in this notification and makes use of the same by assuring the representatives of Appellant 1 who desperately were pursuing their cause for the countersignature on the Project Implementation Authority Certificate genuinely and properly issued by the Appellant 2, that he is in position to arrange for the countersignature against gratification he demands. Such sharks have their eyes wide open searching for such opportunities, which occur and reoccur on account of bureaucratic red tapeism and vague conditions as this one in the exemption notification. 4.28 We observe from plain reading of notification, that the intention of the notification is to exempt the goods imported for a project approved by Government of India and funded by the loan from an international organization. India has embarked on the path of liberalization of economy in the year 1991 with rationalization of tariff etc., to increase foreign investments in the country. This notification seeks to carry forward this spirit and promote foreign investments for the development and evolution of Indian ec....