On writ allowing the petition, that the view of the Assessing Officer that the benefit of section 44BB would be admissible only to the person directly using the services or plant and machinery for exploring, extracting or producing mineral oils and not to the entity which had executed the contract for such person was not in consonance with the text of section 44BB. The service provider being a non-resident, under section 195, the assessee was enjoined to deduct tax thereon at source at the applicable rates. Moreover, the assessee had grossed up the profits by 10 per cent. and had paid the taxes. The scope of work under the contract was comprehensive from survey to the commissioning of entire facilities on turn-key basis at the offshore site. The platform in question was to be used in maintaining and enhancing the production or extraction capacity of mineral oil. The tugs hired by the assessee were used for towing the compression module of platform, from the assessee’s yard to the offshore platform. In connection with the execution of the contract, the Director General of Hydro Carbons had issued an essentiality certificate to import the cargo (barge) for the petroleum operations. The assessee had entered into a contract with the Corporation on turn-key basis for enhancing the exploration or production capacity of the platform at the offshore site and for such purpose the assessee had hired the tugs and barges from non-residents. The authorities were not justified concluding that the use of the tugs and barges was in the nature of a mere transportation facility. On the facts, the Director (IT) had recorded that the tugs were hired by the assessee to transport the compressor module, which was an integral part of the execution of the contract by the assessee from the yard to the offshore platform. Considering the object of special dispensation and the proximate use to which the facility or service or plant and machinery was put, the hire of the tugs and barges to transport an integral part of the equipment to enhance the exploration or production capacity, was inextricably connected with the extraction and production of mineral oil. Therefore, the payments made by the assessee to the non-residents in the execution of the contract with the Corporation was assessable under the provisions of section 44BB. The order passed by the Director (International Taxation) under section 264 and the order passed by the Deputy Director (IT) under section 195 were quashed and set aside.