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TMI Blog2018 (3) TMI 1249X X X X Extracts X X X X X X X X Extracts X X X X ..... itional reimbursement to the petitioner. The scope of interference with the Arbitral Award under Section 34 of the Act is limited. The impugned award can be interfered only on the grounds as set out in Section 34 of the Act. In the present case, the impugned award is neither beyond the jurisdiction of the Arbitral Tribunal nor can be stated to be opposed to the Public Policy of India. Petition dismissed. - O.M.P. (COMM) 121/2018 - - - Dated:- 20-3-2018 - Vibhu Bakhru, J. For the Petitioner : Mr Dayan Krishnan, Sr. Advocate with Ms Megha Mehta Agrawal, Ms Aakashi Lodha and Mr Samith Sagaranahalli For the Respondent : Mr Tarun Johri, Mr Ankit Saini and Mr Ankur Gupta JUDGMENT Vibhu Bakhru, J Introduction 1. The petitioner has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter the Act ) impugning the arbitral award dated 17.11.2017 (hereafter the impugned award ) passed by the Arbitral Tribunal in the context of the disputes relating to the Contract Agreement dated 22.01.2013 (hereafter the Agreement ). The controversy involved in the present petition relates to the petitioner s claim for reimburs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hundred Only) plus US$ 4,34,59,599.48 (US Dollar Four Crores Thirty Four Lakhs Five Hundred Ninety Nine and Forty Eight Cents). 2.7 One of the TBMs (TBM THI-01) was imported from China and arrived in India by the end of the year 2013. It is stated that at the material time, the import was exempt from levy of CVD. 2.8 By a notification dated 03.02.2014 (notification no.4/2014-Cus.) the exemption from levy of CVD on import of TBMs was withdrawn. Thus, with effect from 17.02.2014, the import of TBMs and its accessories were subject to levy of CVD at the rate of 10% and SAD at the rate of 4%. 2.9 TBM (THI-02) the Purchase Order of which was placed on 03.01.2018 arrived at the Indian Port on 03.03.2014 and, therefore, was subject to levy of CVD and SAD. On 12.03.2014, the petitioner made a payment of ₹ 4,91,53,394/- on account of CVD and SAD imposed on import of the said TBM. 2.10 The petitioner made a request for reimbursement of the duties (CVD and SAD) levied on the import of TBM THI-02 on 11.07.2014, which was denied by DMRC on 02.08.2014. 2.11 On 02.02.2015, the petitioner also obtained a clarification from the Economic Adviser, Department of Industrial Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1944 and the said decision would have no application for determining whether the goods were dutiable goods under the Customs Act, 1962. He submitted that nil rate of excise duty on goods did not mean that the said goods were not excisable goods; but, a nil rate of customs duty on import of any goods would imply that the said goods were not exigible to customs duty. Thus, the notification dated 03.02.2014 had the effect of TBM becoming chargeable to customs duty for the first time and the said notification could not be construed as a mere change in the levy of duties. He relied on the decision of the Supreme Court in Associated Cement Companies Ltd. v. Commissioner of Customs: (2001) 4 SCC 593 in support of his contention. 4. Next Mr Dayan Krishnan, contended that the finding of the Arbitral Tribunal that there was delay on the part of the petitioner in importing the TBMs is also erroneous. He stated that the Purchase Order for the two TBMs was placed on 03.01.2013, which was even prior to the petitioner submitting its programme for execution of the Project. The CREG TBM had to be imported as the petitioner encountered hard rock, which was neither the part of the contract nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imbursement of any amount with respect to levy of any additional tax or duties. Thus, even if it is accepted that the effect of notification dated 03.02.2014, whereby CVD at the rate of 10% and SAD at the rate of 4% was levied, was to render the import of TBMs chargeable to customs duty, the petitioner would not be entitled to claim any amount on account of the same. The contract between the parties does not entitle the petitioner to claim any element of costs for execution of the Project. The rates accepted by the DMRC are all inclusive rates. Concededly, the petitioner s claim is not one in the nature of the damages. The petitioner is, essentially, claiming a variation in price. The petitioner has founded its claim on the basis that the price variation clause does not adequately compensate the petitioner because the wholesale Price Index (which is used as an indicator for variation in price) does not factor in custom duties on TBM. The claim made by the petitioner appears to be fundamentally flawed because if the claim for compensation is neither founded as a claim of damages nor included in the price variation clause, there would not be no justification for awarding such additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chedule to theCentral Excise Tariff Act, 1985 (5 of 1986) as being subject to a duty of excise and includes salt . 80. Under the Customs Act, there are two definitions which are relevant. Section 2 (22) defines goods as follows: 2.(22) goods includes (a) Vessels, aircraft and vehicles; (b) Stores; (c) baggage; (d) currency and negotiable instruments; and (e) any other kind of moveable property. In addition thereto, Section 2(14) defines, dutiable goods as follows: 2.(14) dutiable goods means any goods which are chargeable to duty and on which duty has not been paid; 81. Under the Central Excise Act, 1944 in the definition of words excisable goods under Section 2(d), the very specification or inclusion of goods in the First and Second Schedules of the Central Excise Tariff Act would make them excisable goods subject to duty. Under the Customs Act, the provisions seem to be somewhat different. While by virtue of Section 2(22) all kinds of moveable property would be goods but it is only those goods which would be regarded as dutiable goods under Section 2(14) which are chargeable to duty and on which duty has not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re placed at the same time. Whilst TBM THI-01 arrived in India on 01.11.2013, TBM THI-02 arrived much later; thus, the delay in import of TBM THI-02 was not on account of any reason attributable to DMRC. The Tribunal also noted that the petitioner had claimed that the delay in arrival of TBM THI-02 was because of problems related to supplies from Japan which had been affected due to major typhoon. 15. The Memorandum of Understanding dated 08.12.2012 entered into between Larsen Toubro and Hubei Tiandi Heavy Industries Co. Ltd. (THI) specified that TBM THI-01 and TBM THI-02 would be delivered in 31 weeks from the date of MoU and, thus, both the TBMs ought to have been received in India by 14.07.2013. 16. As far as the import of CREG TBM is concerned, the petitioner claimed that the said TBM had been imported on account of meeting hard rock, which was not anticipated earlier. Plainly, this factor cannot be attributed to DMRC and, thus, the petitioner s claim that the delay in import was caused on account of DMRC, is unmerited. 17. Although, this Court has examined the merits of the contentions raised by the petitioner, it was not necessary to do so as the scope of interfere ..... 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