TaxTMI 
TaxTMI 
2004 (2) TMI 96
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....r capacity." The exemption, allowed to the goods specified in the list, was subject to Condition No. 38 stipulated in the Notification. This condition reads : "If - the goods are imported by -(a) (i) the Ministry of Surface Transport, or (ii) a person who has been awarded a contract for the construction of roads in India by or on behalf of the Ministry of Surface Transport, by the National Highways Authority of India, by the Public Works Department of a State Government or by a road construction corporation under the control of the Government of a State or Union Territory; or (iii) a person who has been named as a sub-contractor in the contract referred to in (ii) above for the construction of roads in India by or on behalf of the Ministry of Surface Transport, by the National Highways Authority of India, by Public Works Department of a State Government or by a road construction corporation under the control of the Government of a State or Union Territory; the importer, at the time of importation,(b) furnishes an undertaking to the Deputy C....
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....rned Counsel for the appellants gave a brief account of the relevant facts and stated two main issue to be decided on. The appellant-company viz. M/s. IVRCL Infrastructures & Projects Ltd. ["IVRCL", for short] entered into a Joint Venture Agreement with M/s. Shapoorji Pallonji & Co. Ltd. ["SPCL", for short] in October, 2000. The National Highways Authority of India (Ministry of Road Transport and Highways, Govt. of India) in June, 2001 awarded to this Joint Venture a contract for construction of roads (including upgrading of existing roads, construction of service roads and other auxiliary works) in the Srikakulam-Palasa segment of NH-5 in Andhra Pradesh) which was referred to as "Contract Package AP-2" in the relevant agreement, which was executed on behalf of NHAI by its General Manager (East-I) and on behalf of the SPCL-IVRCL Joint Venture by the Authorised Representatives of the two companies. A Hot Mix Plant (Batch Type) of capacity above 140 Tons/hour was required for execution of the road construction work. Therefore, IVRCL placed a purchase order with M/s. Lintec GmbH & Co. KG ["Lintec", for short] for Hot Mix Plant (Batch Type) of capacity 160 Tons/hour and the goods suppl....
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....sel relied on the Supreme Court's judgment in New Horizons Ltd. & Another v. Union of India & Others [(1995) 1 SCC 478] to explain the concept of Joint Venture. He submitted that IVRCL was entitled to import the plant for and on behalf of the Joint Venture and therefore the contra view taken by the Commissioner required to be rejected. 4.Learned SDR, on the first issue, submitted that, as per the purchase order given by IVRCL to Lintec vide Annexure-4 to the appeal, the price of the complete Hot Mix Plant was DM 906,574/-; that, out of this amount, only an amount of DM 550,000/- was paid by IVRCL to Lintec which was for supply of only some components of the plant; that the balance amount of DM 356,574/- was the payment given to Lintec's Indian Counterpart viz. M/s. Marshall Sons & Co. (Mfg.) Pvt. Ltd. ["Marshall", for short] for the supply of indigenous components and for erection of the plant at the project site. Whereas the total cost of Hot Mix Plant agreed between IVRCL and Lintec Was DM 906,574/-, the payment actually made to the German supplied was only DM 550,000/-, which clearly indicated that the complete plant was not imported by IVRCL. Only some critical parts of the ....
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...., if successful, tender for the road works of NHAI "under joint and several responsibilities sharing risks, liabilities, payable and receivable monies in proportion as mutually agreed towards performance of these contracts and their successful completion". SPCL and IVRCL would provide Equity in the project in the ratio 51:49 and would provide finances, machinery etc. in proportion to their shares of work. SPCL was to be the prime contractor with the entire technical and contractual responsibilities for execution of the contract. The control, management and supervision of the works would be exercised by an Executive Board/Committee headed by a representative of SPCL and with four other members two from each party. SPCL was nominated as partner-in-charge to act on behalf of the Joint Venture in the prequalification/tender proceedings. Shri J.K. Trivedi of SPCL (partner-in-charge) was nominated to act on behalf of the Joint Venture and be a single point contract for the client (NHAI). It was also provided that the payments made by NHAI to the Joint Venture shall be operated by the authorized representatives of the Joint Venture. The partner-in-charge was authorized to "incur liability....
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....IVRCL Joint Venture. Accordingly any one of the partners could represent the Joint Venture in its transactions with third parties. As far as the contract between the Joint Venture and NHAI was concerned, the Customs department was a third party, though the subject import was incidental to execution of the said contract. Hence any of the partners of the Joint Venture was competent to transact business with the department on behalf of the Joint Venture. In this context, a question could be raised : Was IVRCL competent to import the goods and file Bill of Entry for clearance thereof when the Joint Venture Agreement had expressly nominated SPCL as partner-in-charge with authority to incur financial liability for and on behalf of the Joint Venture? The Joint Venture Agreement did not specifically nominate or authorize the partner-in-charge or the other partner for the import and the Customs formalities connected therewith. Any of the partners could do the job for the Joint Venture. The Joint Venture was the contractor employed by NHAI and IVRCL, being its partner, lawfully represented it for the job at Customs. the Revenue has no case that there was any dispute between the partners over....
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.... consisting of a few Indian companies (with 60% share capital) and a Singapore-based company (with 40% shares) had participated in tender proceedings of the Department of Telecommunication for printing and binding of telephone directories of Delhi and Bombay. A rival participant was M/s. M&N Publications Ltd. (for short, MNPL). The total amount of royalty for three years offered by NHL was Rs. 459.90 lakhs as against Rs. 95 lakhs offered by MNPL. However, it was the tender of MNPL that was accepted by the Tender Evaluation Committee, apparently, on the basis of the fact that the said company had more technical experience than any one of the constituent companies in NHL. NHL petitioned the Delhi High Court. A Division Bench of the High Court dismissed the writ petition, refusing to recognize NHL as a Joint Venture, thereby rejecting their plea that the technical experience of the constituents of the Joint Venture was liable to be treated as that of the Joint Venture. NHL appealed to the Supreme Court. Their Lordships of the Apex Court examined the concept of "Joint Venture" and held that it was a legal entity in the nature of partnership engaged in the joint undertaking of a particu....
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....ure corporation has been defined as a corporation which has joined with other individuals or corporations within the corporate framework in some specific undertaking commonly found in oil, chemicals, electronic, atomic fields (Black's Law Dictionary, 6th Edn., p. 342) Joint Venture companies are now being increasingly formed in relation to projects requiring inflow of foreign capital or technical expertise in the fast developing countries in East Asia, viz. Japan, South Korea, Taiwan, China, etc. [See Jacques Buhart : Joint Ventures in East Asia - Legal Issues (1991).]. There has been similar growth of joint ventures in our country wherein foreign companies join with Indian counterparts and contribute towards capital and technical know-how for the success of the venture. The High Court has taken note of this connotation of the expression "joint venture". But the High Court has held that NHL is not a joint venture and that there is only a certain amount of equity participation by a foreign company in it. We are unable to agree with the said view of the High Court." It would thus appear that the Indian"25. group of companies (TPI, LMI and WML) and the Singapore-based company (IIPL....
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....Gammon - Atlanta Joint Venture was not a corporation and therefore there was no question of 'lifting the corporate veil'. In the instant case too, there being no evidence of incorporation of the SPCL - IVRCL Joint Venture under the Companies Act, we find that the doctrine of 'lifting the veil' is not applicable. However, in our view, there is no reason why the legal entity-cum-partnership concept of Joint Venture adopted by the Apex Court should not be applied to this case. The Commissioner himself recognized SPCL - IVRCL as a Joint Venture. It was a legal entity in the nature of a partnership of the constituent companies. By virtue of the partnership character, any of the partners was entitled to import the goods for and on behalf of the partnership as the Joint Venture Agreement did not expressly provide otherwise. As the Joint Venture was a legal entity i.e. a juridical person as ruled by the Apex Court, it was also a "person" for the purpose of Condition No. 38 which stipulated that the goods should be imported by a person who had been awarded a contract for construction of roads in India by NHAI. Therefore, we are of the view that the importation and clearance of goods by IVRC....
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.... also come across the work order issued by IVRCL to M/s. Marshall Sons & Co. (Mfg.) Ltd., Chennai. This work order gives the following description of work : "assembling of equipment supplied by Lintec vide P.O. No. SRP/CAP/11/2K1-02, dated 21-7-2001 and also supply and erection of own structures as mentioned in Annexure". The total cost of work shown in the work order is DM 356,574. We note that the amount shown in Annexure-4/purchase order is the arithmetical sum of the amounts shown in Annexure-6/purchase order and Annexure-7/work order and, further, that the description of work allotted to Marshall includes supply and erection of structures, apart from assembling of the equipments supplied by Lintec . It is clear from these facts that some of the components viz. structures for the hot mix plant were supplied by Marshall, that the amount paid to them towards cost of such components and cost of assembling of Hot Mix Plant was DM 356,574, that the amount paid by IVRCL to Lintec for the components supplied by the latter was DM 550,000 and that the total cost of the hot mix plant as erected at the project site was DM 906,574. Lintec's letter to IVRCL vide Annexure-5 itself had called....
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.... Ltd. (supra) to argue that the relevant entry in List 11 should be liberally construed so as to give effect to the notification in respect of the imported goods. In the cited case, the assessee had claimed the benefit of exemption in terms of Sr. No. 8 of the Table annexed to the Notification, in respect of the goods imported by them. The said entry reads thus : "High Speed Warping machine with yarn tensioning, pneumatic suction devices and accessories." With reference to accessories used in the above description, the Tribunal has observed that it is common understanding that accessories may or may not be imported along with a machine and import of the same is optional. The Tribunal treated pneumatic suction devices as an accessory to the machine and accordingly rejected the department's stand that the benefit of exemption under the notification was not available to the Warping Machine imported without pneumatic suction devices. The facts, in the instant case, are different. The term "accessories" does not figure in the description of goods at Item No. (1) of List-11 under the notification. Moreover, some essential components of hot mix plant were not imported but locally procured....