No import duty after Essentiality Certificate: SC
New
Delhi,
Apr
1:
In
an
important
ruling,
the
Supreme
Court
has
held
that
no
import
duty
can
be
imposed
on
items
for
which
an
Essentiality
Certificate
was
issued
by
the
sponsoring
ministry
for
the
expansion
of
an
industrial
project.
A
Division
Bench
comprising
Justices
S
H
Kapadia
and
B
Sudershan
Reddy,
while
allowing
the
appeal
of
Goa-based
M/s
Zuari
Industries
Ltd,
manufacturers
of
fertilisers,
set
aside
the
March
1997
order
of
the
Customs,
Excise&Gold
(Control)
Appellate
Tribunal
(CEGAT)
denying
exemption
of
duty
to
the
firm.
The
apex
court
said
the
Assessing/Customs
authorities
cannot
act
beyond
the
decision
of
the
government
on
such
matters.
The
appellant
company
has
imported
machinery
for
setting
up
a
6
MW
Captive
Power
Plant.
The
imports
fell
under
serial
no.
226(i)
as
goods
required
for
the
substantial
expansion
of
the
fertiliser
project
and
thus
entitled
to
full
exemption
of
customs
duty.
The
Union
Ministry
for
Chemicals
and
Fertilisers,
the
sponsoring
ministry,
had
issued
an
Essentiality
Certificate
to
the
appellants
after
the
company
submitted
the
complete
project
report
to
the
ministry.
The
apex
court
in
its
judgment
dated
March
29
noted,
''An
Essentiality
Certificate
must
be
treated
as
a
proof
of
fulfilment
of
the
eligibility
conditions
by
the
importer
for
obtaining
the
benefit
of
the
exemption
notification.
The
Certificate
is
also
a
proof
that
an
item
like
a
Captive
Power
Plant,
in
the
given
case
could
be
treated
as
a
capital
goods
for
the
fertilizer
project.
However,
it
would
depend
upon
the
facts
in
each
case.
''If
a
project
is
to
be
installed
in
an
area
where
there
is
a
shortage
of
electricity
and
if
that
project
is
approved
by
the
sponsoring
ministry
saying
that
such
supply
is
needed
than
the
Revenue
cannot
go
beyond
such
certificate
and
deny
the
benefit
of
exemption
from
payment
of
duty
or
nil
rate
of
duty
provided
continous
flow
of
electricity
is
needed
for
the
project,''
the
court
held.
UNI