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2018 (3) TMI 518 - AT - CustomsInterpretation of N/N. 21/2002-Cus dated 1.3.2002 - It stands contended that M/s Hyderabad Growth Corridor Ltd. is Road Construction Corporation under the control of the State of Andhra Pradesh and the findings of the original adjudicating authority that the said Hyderabad Growth Corridor Ltd. is not under the control of State Government is based upon wrong appreciation of the Memorandum of Association. Held that - The reasoning of the adjudicating authority that importer did not bring the relevant fact of the Hyderabad Growth Corridor Ltd., not being specified agency in the notification, before the assessing officer, would amount to fraudulent exercise, thus enabling the Revenue to initiate the proceedings by invoking the longer period of limitation does not appeal to us inasmuch as admittedly the fact that the order stand placed upon them by Hyderabad Growth Corridor Ltd. was placed before the assessing authority. If the Revenue intended to further investigate the matter, they were well within the power and jurisdiction to call for the Memorandum of Association and Article of Association of Hyderabad Growth Corridor Ltd. The fact that such Memorandum of Association was not placed before the authority cannot amount to any mala fide on their part in the absence of any requirement or obligation by law to place such Memorandum of Association before the assessing authority. Demand is barred by time limitation - appeal allowed - decided in favor of appellant.
Issues:
Interpretation of Notification No. 21/2002-Cus dated 1.3.2002 for exemption of goods for road construction based on specific conditions. Analysis: The dispute in the appeals revolved around the interpretation of Notification No. 21/2002-Cus, particularly Entry No. 230, which provided exemption for goods required for road construction subject to fulfilling condition No. 40. Condition No. 40(ii) specified that the exemption applied to goods imported by a person awarded a road construction contract by specified government organizations. The appellants had been awarded a contract by Hyderabad Growth Corridor Ltd., a Special Purpose Vehicle with equity participation from government entities, for a road construction project. They claimed exemption under the notification by fulfilling the required conditions and providing necessary documentation to the Customs authority. However, subsequent investigations led to a show-cause notice proposing denial of the exemption, duty demand, confiscation of goods, and penalties. The Customs authority alleged that the appellant was not eligible for exemption as the awarding entity, Hyderabad Growth Corridor Ltd., was not a government-controlled road construction corporation as per the notification's conditions. The Commissioner of Customs upheld the denial of exemption and imposed penalties, leading to the present appeal. The appellant argued that Hyderabad Growth Corridor Ltd. qualified as a government-controlled road construction corporation, disputing the authority's interpretation based on the company's shareholding structure. The appellant contended that the Commissioner erred in considering authorized shares instead of preference shares, highlighting that the government entities held a significant portion of preference shares, indicating control over the corporation. They also argued that the demand was time-barred, as the Customs officer had already assessed the imports and extended the benefit of the notification without any indication of ineligibility. Upon review, the Tribunal found that the appellant's exemption claim had been duly scrutinized during import, with all relevant documents provided to the Customs officer. The Tribunal disagreed with the authority's assertion of fraudulent concealment, noting that the appellant had disclosed the contract with Hyderabad Growth Corridor Ltd. If further investigation was necessary, the Revenue could have requested additional documentation. As there was no obligation to submit the Memorandum of Association, the demand was deemed time-barred, and the appeals were allowed without delving into the merits of the case. In conclusion, the Tribunal set aside the demand based on the limitation issue, granting relief to the appellants in accordance with the law.
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