Per Gowri Shankar : Gammon India Ltd., Mumbai, the respondent to this appeal, and Atlanta Infrastructure Ltd., Mumbai, entered into a joint venture agreement on 18th September, 2000. The agreement was entered into for the purpose of tendering a bid to the National Highway Authority of India in order to secure the contract for construction of the stretch from 31.40 kilometers on national highway 5. The venture provided for financial responsibilities of each party in the form of guarantees, securities etc., to the extent of 50% of project value, for setting up a management board to manage the venture, composed of a chairman and director to be appointed by Gammon India Ltd. and a joint chairman and another director to be appointed by Atlanta Infrastructure Ltd. It provided that the parties shall be jointly and severally liable to the National Highway Authority of India for execution of contract. It designated Gammon India Ltd. to be the lead partner to the venture.

2. The bid tendered by the joint venture was accepted by the National Highway Authority of India. Gammon India Ltd. subsequently imported a mobile batching plant which, we are told, is an equipment required in road concrete mixing plant. In the bill of entry that it filed in the Bombay Custom House in July 2001 for clearance of this plant, it claimed exemption from duty in terms of entry 217 of the table to Notification 17/2001. This entry exempts from duty goods specified in the notification required for construction of roads subject inter alia to the condition that the goods are imported by the Ministry of Surface Transport or a person who has been awarded a contract for construction of roads in India by or on behalf of the Ministry of Transport or other authorities designated in the notification of the Central or State Government or by a person as sub-contractor to a contract that has been awarded by any of these authorities. With regard to two of the machinery qualifying for exemption, stone crushing (cone type) plants and concrete batching plants 50 cum/hr, the exemption is also subject to the further condition and that the importer produces a certificate from not below the rank of Deputy Secretary in the Ministry of Surface Transport (Roads Wing) of the Government of India to the effect that the imported goods are required for construction of roads in India. The Custom House proposed to deny the exemption on the ground that the contract for construction of the stretch on highway in question had been awarded not to Gammon India Ltd., the importer of the goods, but to Gammon-Atlanta (JV) and that the certificate issued by the Deputy Secretary to the Government of India in terms of the exemption, in regard to batching plant is indicated that the contract had been awarded to the Gammon-Atlanta (JV) and not to Gammon India Ltd. The importer waived issue of notice at the hearing and requested a decision. The Deputy Commissioner of Customs, basing his reasoning on the grounds above, and holding that an exemption notification is strictly interpreted, concluded that since the importer did not satisfy the conditions contained in the exemption notification, it was not entitled to the exemption and denied it.

3. The importer appealed from this order to the Commissioner (Appeals). The Commissioner (Appeals) took the view that the benefit of the exemption was available for the following reasons. The joint venture agreement provided that each of the parties shall be jointly and severally liable to the National Highway Authority of India. It further provided Gammon India Ltd. to bethe lead partner who was authorised to receive instructions for and on behalf of the partners of the joint venture. The goods were required for the purpose of the project and "the statutory authority has also issued the necessary certificate for duty free import.. May be due to some technical reasons the goods have been imported in the name of Gammon India Ltd. still out right denial of the exemptio