IMPORTANT POINTS
Whereas eligibility criteria laid down in an exemption notification are required to be construed strictly, once it is found that the applicant satisfies the same, the exemption notification should be construed liberally.
Statement made to an Officer of Customs is admissible in evidence.

JUDGMENT

R.F. Nariman, J.

1. The facts necessary to decide this appeal are as follows. The appellant entered into a Joint Venture Agreement with M/s Shapoorji Pallonji & Company Limited for the purpose of construction of roads in the State of Andhra Pradesh. The Joint Venture was awarded a contract by the National Highways Authority of India for construction of roads as a part of the Golden Quadrilateral, Phase-2 Project in Andhra Pradesh.

2. Vide a notification dated 1.3.2001, in exercise of powers under Section 25(1) of the Customs Act, certain items were exempted from payment of customs duty and additional duty leviable under the Customs Tariff Act. We are concerned with serial No.217 of this notification which reads as follows:

"217. 84 or any other Goods specified in List 11 Nil

Nil 38

Chapter required for construction

of roads."

The conditions by which the exemption is attracted is set out in item 38 as follows:

“38. If, -

(a) the goods are imported by –

(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 Highway 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 Highway 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;

(b) the importer, at the time of importation, furnishes an undertaking to the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, to the effect that he shall use the imported goods exclusively for the construction of roads and that he shall not sell or otherwise dispose of the said goods, in any manner, for a period of five years from the date of their importation; and

(c) in case of goods of serial nos. 12 and 13 of List 11, the importer, at the time of importation of such goods, also produces to the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, a certificate from an officer not below the rank of a Deputy Secretary to the Government of India in the Ministry of Surface Transport (Roads Wing), to the effect that the imported goods are required for construction of roads in India.”

List 11 with which we are concerned contains several entries. We are concerned with Entry No.1 which reads as follows:

“(1) Hot mix plant batch type with electronic controls and bag type filter arrangements more than 120 T/hour capacity.”

A purchase order was placed by the appellant on M/s Lintec GmbH & Co.KG, Germany, for supply of a hot mix plant for a total value of 906,574 DM. Lintec and the appellant decided to split the purchase order between Lintec, Germany and M/s Marshalls, Chennai. Lintec was now to receive a total value of 585,700 DM and Marshalls was to receive the balance. Lintec was to supply the “critical items” required for the setting up of the said plant, whereas Marshalls was to supply various containers, frames, ducting, tanks and a thraw belt conveyer apart from agreeing to set up the plant after it is imported. Vide a Bill of Entry dated 28.12.2001, the import of equipment from M/s Lintec was made by the appellants, who claimed that the said items fell within the scope of the exemption notification dated 1.3.2001 and, therefore, were exempt from payment of customs duty on the same. The Customs Authorities, however, maintained that what was imported was not a hot mix plant but only certain parts of such plant and, therefore, the exemption notification would not apply. Various representations were then made to th