Judgment

S.B. SINHA, J.-

The appellant before us is an undertaking wholly owned and controlled by the Central Government. It obtained the services of M/s SEDCO Forex Int. Drilling Inc. for exploration of oil and gas onshore and offshore. A contract was awarded by it to a company known as M/s SEDCO Forex Int. Drilling Inc. specialising in finding out the possibility of oil or gas by carrying out seismic surveys. The information gathered by reason of such survey was recorded in 3-D seismic tapes.

2. A question arose as to whether the same would attract the exemptions from payment of customs duty in terms of the entries contained in SL. Nos. 182,184 and 231 of the notification dated 28-2-1999.

3. For the aforementioned purpose, indisputably, an essentiality certificate was required to be issued by the Directorate General of Hydrocarbons. Prerequisite for grant of such certificate was also a valid petroleum exploration licence.

4. The licence granted by the Central Government in favour of the appellant in that behalf was initially valid up to 14-11-1997. The appellant applied for renewal thereof on 7-10-1997. An application for grant of essentiality certificate was filed on 5-4-1999. The same was returned to the appellant on 12-4-1999. By an order dated 18-8-2000, the said licence was renewed with retrospective effect from 14-11-1997 by the Central Government. Immediately, thereafter i.e. on 20-8-2000, the appellant filed an application for grant of essentiality certificate in continuation of its earlier application dated 5-4-1999. It also sent reminders therefore on 26-3-2001, 13-4-2001, 27-12-2001 and 8-7-2003. The appellant was asked to resubmit the application in a new format which requirement was also complied with by it on 25-3-2004. In the said application also, the appellant categorically stated that the same was in continuation of its earlier application dated 5-4-1999 where after the essentiality certificate was granted on 26-3-2004.

5. Admittedly, the said 3-D seismic tapes were treated to be the "goods" within the meaning of the provisions of the Customs Act, 1962. The said goods were cleared provisionally but in view of the fact that the appellant had failed to produce the essentiality certificate, a notice to show cause was issued as to why the said data tapes should not be classified under Customs Tariff Heading 8524.99 and charged to duty on the basis of the amount paid by the appellant to the said SEDCO.

6. The matter ultimately came up before the Customs, Excise and Service Tax Appellate Tribunal, which was heard along with a similar case of Tullow India Operations Ltd. (Tullow). Whereas Tullow could produce the essentiality certificate before the Tribunal, the appellant could not.

7. The matter came up before this Court at the instance of the appellant. It filed an application for urging additional grounds inter alia relying on or on the basis of the said essentiality certificate granted in its favour on 26-3-2004.

This Court, opining that grant of essentiality certificate should be treated to be a proof of the fact that the appellants had fulfilled the conditions enabling them to obtain the benefits under the aforementioned exemption notification, remitted the matter to the Commissioner for consideration thereof afresh having regard to the similar directions issued by the Tribunal in Tullow.

8. Pursuant to or in furtherance of the said directions, the Commissioner has passed an order dated 28-2-2006, holding:

"I hold that the EC dated 26-3-2004 cannot be accepted and accordingly exemption under Sl. No. 182 of Notification No. 20/99-Cus. dated 28-2-1999 (since rescinded), is not available on the data tapes imported by M/s ONGC vide Bills of Entry No. 9888 dated 22-6-1999 and No. 12443 dated 28-5-1999.

I, therefore, confirm the duty demand of Rs 49,68,70,160 on M/s ONGC. Since an amount of Rs 25,00,00,000 had already been paid by M/s ONGC towards the principal amount on 14-9-2004, the balance amount of Rs 24,68,70,160 is