By TIOL News Service

NEW DELHI, JUNE 09, 2015: ALL in academic interest.

This is an order of the Larger Bench which the Registry 'inadvertently' did not issue earlier - the forwarding letter says so. Earlier, meaning in the month of September 2013.

It may also be noted that the appeal has been already decided and reported by us. Details later.

Be that as it may, take a look at the facts that lead to the reference to the Larger Bench.

The appellants had imported a stone crushing plant and a hot mixing plant by availing exemption under notification no. 21/02-Cus dated 1.3.2002, serial no. 230. It is the case of the department that the appellants have not used the machinery for the purposes specified in the notification and have also parted with one of the machineries contravening the terms of the undertaking given under condition 40 specified against sr. no. 230 of the table annexed to the impugned notification.The Commissioner of Customs (Imports), Mumbai confirmed the allegations leveled in the demand notice.

In the matter of Stay application filed by the importer, the CESTAT held -

Machinery for use in road construction - Notification no. 21/2002-Cus does not have any post-importation conditions to ensure fulfillment of the terms of the undertaking - stipulation that the amount is payable for failure of the terms of the undertaking is not available - department has not alluded to any evidence that the impugned goods have been put to any other use - Pre-deposit offer of Rs.22 lakhs made by the appellant appears acceptable for the purpose of hearing the appeal: CESTAT

We reported the above stay order as 2011-TIOL-50-CESTAT-MUM.

When the appeal came up for hearing, the Bench observed that the issue before it is whether MMRDA is a Road Construction Corporation under the control of the Government of a State or Union Territory or not.

The appellant submitted that the issue had come before the Bench in the case of Patel Engineering Ltd. &Ors. and vide order No. A/150 to 159/2012/CSTB/C.I dated 1.3.2012 - 2012-TIOL-2027-CESTAT-MUM the tribunal held that the MMRDA is a Road Construction Corporation and the said order has been affirmed by the apex Court; therefore, the appellants have fulfilled the condition No. 40(a) of the Notification No.21/2002 (sl.no.230).

The Revenue representative submitted that in the case of Shreeji Construction vs CC(I), Mumbai - 2013-TIOL-441-CESTAT-MUM, the CESTAT has held that MMRDA is not a Road Construction Corporation.

And so, the Division Bench referred the matter to the President to place before the Larger Bench the following issue -

This order dated 31.05.2013 was reported by us as 2013-TIOL-1069-CESTAT-MUM.

We did not hear anything after that but the final order.

As mentioned, the Larger Bench order remained to be issued by the Registry. But there is no damage as the Larger Bench held that the conflict assumed in the order of reference dated 31.05.2013 is misconceived and there is no warrant for the Larger bench to resolve a non-existent conflict.

These were the observations of the Larger Bench -

"6. We have carefully perused the judgments in Patel Engineering Limited and Shreeji Construction. We notice that the issue whether MMRDA is a road construction corporation was not in issue in Patel Engineering Limited. The appellant/assessee in Patel Engineering Limited had clearly asserted that the issue whether MMRDA is a road construction corporation is not in dispute and that Revenue does not dispute the status of MMRDA as a road construction corporation (para 4(b) and (c)of the reported judgment). The Tribunal itself recorded in para 9 of its order that it agrees with the contention urged on behalf of the appellant that Condition No. 40(a) is fully satisfied (by the appellant), since MMRDA being a road construction corporation was not disputed by Revenue. Whether MMRDA is road construction corporation, within the scope and context of Condition No. 40(a) of the Notification was therefore not in issue in Patel Engineering Limited. This decision is thus not an authority for the proposition that MMRDA is a road construction corporation. This judgment is only relevant to the extent it records the fact that Revenue has not disputed the status of MMRDA being a road construction corporation in the context of Condition No. 40(a) of the Notification.

7. In Shreeji Construction, the appeal was again preferred by an assessee against an appellate order dated 11.09.2012 passed by Commissioner of Customs, Mumbai. The primary adjudicating authority as well as the Commissioner (Appeals) concurred that the assessee was disentitled to the benefits under Notification No. 21/2002-Cus. since it did not satisfy the conditions of the Notification. Before the Tribunal the assessee contended that since the relevant contract was awarded to it by MMRDA which was a road construction corporation falling within the scope of Condition No. 40(a) of Notification No. 21/2002-Cus., the assessee was entitled to the benefits of the Notification and denial of the benefits by the adjudicating authority and confirmation thereof by the Commissioner (Appeals), was unsustainable. In the circumstances, the Tribunal was invited to and proceeded to answer the disputed issue as to whether MMRDA was a road construction corporation. Shreeji Corporation on a careful and detailed analysis of the constitutive and organisational architecture of MMRDA clearly held that this body is not a road construction corporation. This conclusion is the distillate of a critical analysis of the statutory origins, character and the generic statutory functions consecrated to MMRDA.

8. In the circumstances, there is no conflict between the judgments in Patel Engineering Limited and Shreeji Construction. The only decision of the Tribunal where a pronouncement of the character of MMRDA is recorded in Shreeji Construction, where it is concluded that MMRDA is not a road construction corporation within the meaning of the said expression, under Condition No. 40 (a) of Notification No. 12/2012-Cus."

For the aforesaid reasons, the Larger Bench declined to answer the reference and the same was rejected. The appeal was remitted to the appropriate bench.

And as reported by us earlier, the Division Bench while partly allowing the appeal concluded - 2015-TIOL-244-CESTAT-MUM -

Cus - Not. 21/2002-Cus - Import of Road Construction Machinery - MMRDA is not a Road Construction Corporation, hence benefit of exemption not available - as appellant did not utilise the goods for a period of five years for the construction of roads by himself, there is a clear violation of the post-importation condition - nonetheless, as the goods were used for construction of roads even though by others, penalty u/s 112 would suffice as against equivalent penalty u/s 114A: CESTAT

The missing link - found at last!

(See 2015-TIOL-1067-CESTAT-DEL-LB)