The appellant company had entered into a joint venture with another company\u00a0\u00a0\u00a0 for the purpose of construction of road as a contractor of National Highways Authority of India (NHAI). The Contract for the\u00a0 construction was awarded to\u00a0 the Joint venture of the appellant, namely \u201cGammon Atlanta JV\u201d. The Central Government had issued exemption notification No. 17\/2001\/Cus. exempting goods of specified description from levy of custom duty. The said exemption was, however, subject to certain conditions enumerated in\u00a0 the notification. One of\u00a0 the conditions was that the goods shall be imported by a person who has been awarded a contract for the construction of roads by the specified authorities.\u00a0 The appellant, being the lead partner in the joint venture, imported a machinery required for the construction of the road and claimed the exemption from custom duty as per the notification. However, the Adjudicating Authority rejected the claim of exemption on the ground that the machinery is not imported by the person who was awarded the contract (the JV) but by one of the constituents of\u00a0\u00a0\u00a0 the JV (the appellant). The appeal filed by the appellant before the Commissioner of Customs (Appeals) was allowed on the\u00a0 ground that\u00a0 the\u00a0 appellant was\u00a0 not an outsider and the import was made in the name of the appellant due to\u00a0 some technical reasons. The revenue carried the matter in further appeal to the Tribunal. The Tribunal allowed the appeal of the revenue and confirmed the view taken by the Adjudicating Authority. The Tribunal,\u00a0 inter alia<\/em>, held that the benefit\u00a0 of the exemption notification cannot be availed by the joint venture also because\u00a0\u00a0\u00a0 it is nothing more than an association of two persons, having no identity in law. Against the order of the Tribunal, the appellant filed an appeal to the Supreme Court.<\/p>\n \u00a0<\/p>\n Whether a joint venture is a legal entity akin to a partnership and the general principles of the Indian Partnership Act, 1932 are applicable to the joint venture.<\/p>\n \u00a0<\/p>\n The Supreme Court in the case of New Horizons Ltd. & Another v. Union of\u00a0 India & Others (1995) 1 SCC 478 <\/em><\/strong>hasheld that a joint venture is a legal entity<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n with all the trappings of a partnership under the Indian Partnership Act, 1932 and therefore the general principles of the said Act are applicable to the joint venture.<\/p>\n \u00a0<\/p>\n The decision of the Supreme Court in New Horizons (supra) recognizes a joint venture to be a legal entity in the nature of a partnership of the constituent companies. As a natural corollary the JV between the appellant and Atlanta could be treated as a legal entity with the character of a partnership in which the appellant was one of the constituents.<\/p>\n \u00a0<\/p>\n Whether import of machine by Gammon can be considered to be an import by a person who has been awarded a contract for construction of the roads in India so\u00a0 as to fulfil the condition of the exemption notification.<\/p>\n \u00a0<\/p>\n In identical fact situations in the cases of IVRCL Infrastructures & Projects\u00a0 Ltd. v. C.C. Chennai (2004) 166 ELT 447;<\/em><\/strong>and Techni Bharathi Ltd. v. C.C. Mumbai (2006) 198 ELT 33, <\/em><\/strong>when machinery for a road project was imported by one of the constituents of the joint venture, the benefit of the same exemption notification has been granted by the Tribunal. The said orders of the Tribunal having been accepted by the revenue it cannot be permitted to take a different stand on the same point in the case of the appellant.<\/p>\n \u00a0<\/p>\n The Supreme Court took the cognizance of the finding of\u00a0 facts as\u00a0 recorded by\u00a0 the Tribunal that the placement of import order was\u00a0 by\u00a0 the\u00a0 appellant and\u00a0 not the joint venture and the payment was also made by the appellant from its own account and not from the joint venture account. The Supreme Court, further observed that it was not the case of the appellant either before the Adjudicating Authority or before the Appellate Authority or before the Court that the import\u00a0\u00a0\u00a0\u00a0\u00a0 of machine was by or on behalf of the joint venture. As such, the inevitable conclusion was that import of the\u00a0 machine\u00a0 by\u00a0 appellant cannot be\u00a0 considered as an import by the joint venture and therefore neither the joint venture nor the appellant fulfil the requirement of the exemption notification.<\/p>\n However, after deciding the issue on merits, the Hon. Supreme Court expressed their deep concern on the conduct of the two Benches of the Tribunal while deciding the appeals in the cases of IVRCL Infrastructure & Projects Ltd (supra) & Techni Bharathi Ltd. (supra). Despite the above decisions of a co-ordinate Bench, the Tribunal still thought it fit to proceed to take a view totally contrary to the\u00a0\u00a0 viewtaken in the earlier judgment, thereby creating a judicial uncertainty with<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n regard to the declaration of law involved on an identical issue in respect of the same exemption notification. The\u00a0 Supreme Court emphasized, that if\u00a0 a\u00a0 Bench of a Tribunal, in identical fact situation, is permitted to come to a conclusion directly opposed to the conclusion reached by\u00a0 another Bench of\u00a0 the\u00a0 Tribunal\u00a0 on earlier occasion, that will be destructive of institutional integrity itself. What\u00a0\u00a0\u00a0\u00a0 is important is that the Tribunal is an institution and not the personality of the members constituting it. If a Bench of the Tribunal wishes to take a view different from the one taken by the earlier Bench, the propriety demands that it should place the matter before the President of the Tribunal so that the case is referred\u00a0\u00a0\u00a0\u00a0 to a larger Bench, for which the provision exists in the Act itself. In this context,\u00a0 the Supreme Court reproduced the observations by a three judge bench of the Supreme Court in Sub-inspector Rooplal & Another v. Lt. Governor & Others (2000) 1 SCC 644 <\/em><\/strong>as under :<\/p>\n \u201cAt the outset, we must express our serious dissatisfaction in\u00a0 regard to\u00a0 the manner in which a Coordinate Bench of\u00a0 the\u00a0 Tribunal\u00a0 has\u00a0 overruled, in effect, an earlier judgment of another Coordinate Bench of the same Tribunal. This is opposed to all principles of judicial discipline. If at all,\u00a0\u00a0\u00a0\u00a0 the subsequent Bench of the Tribunal was of the opinion that the\u00a0 earlier view taken by the Coordinate Bench of the same Tribunal was incorrect, it ought to have referred the matter to a larger Bench so that the difference of opinion between the two Coordinate Benches on the same point could have been avoided. It is not as if the latter Bench was unaware of the judgment\u00a0\u00a0\u00a0 of the earlier Bench but knowingly it proceeded to disagree with the said judgment against all known rules of precedents\u2026\u2026.\u201d<\/em><\/p>\n The Supreme Court concurred with the said observations and directed that that\u00a0\u00a0\u00a0 all the Courts and various Tribunals in the country shall follow these salutary observations in letter and spirit.<\/p>\n \u00a0<\/p>\n Whether a beneficial and promotional exemption notification has to be construed liberally<\/p>\n \u00a0<\/p>\n As held by the Supreme Court in Commissioner of Customs (Preventive), Mumbai v. M. Ambalal & Co. (2011) 2 SCC 74<\/em><\/strong>, a beneficial and promotional exemption notification has to be construed liberally.<\/p>\n \u00a0<\/p>\n The Supreme Court referred to and relied upon its earlier decision in the case\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 of Novopan India Ltd., Hyderabad v.Collector of Central Excise & Customs (1994) Supp (3) SCC 606 <\/em><\/strong>wherein it was held that the principle that in case of<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n ambiguity, a taxing statute should be construed in favour of the assessee does not apply to the construction of an exception or an exempting provision, they have\u00a0\u00a0\u00a0\u00a0\u00a0 to be construed strictly. Applying the principle, the Supreme Court held that in\u00a0\u00a0 the instant case, the language of the condition in the exemption notification is\u00a0 clear and unambiguous and hence there is no need to resort to the interpretative process in order to determine whether the said condition is to be imported with strict or liberal construction. (CA.No.5166 of 2003 dt. 6-7-2011)<\/p>\n Editorial <\/em><\/strong>: The Bombay High Court in the case of Hatkesh Co-op Housing Society Ltd. (2016) 243 Taxman 213 (Bom.) (HC) <\/em><\/strong>has held that when identical issue had earlier arisen before Co-ordinate Bench of the Tribunal on identical facts and view had been taken on the issue then judicial discipline would demand that subsequent Bench of Tribunal hearing same issue should follow the view taken\u00a0\u00a0\u00a0 by its earlier Co-ordinate Bench. However, if Tribunal\u00a0 had\u00a0 different view than the view taken by its Co-ordinate Bench on identical issue, then order taking such different view must record its reasons as to why it did not follow earlier order of Tribunal on identical issue, which could only be on one of well settled exceptions which affect binding nature of earlier order. It could also depart from earlier view of Tribunal, if there was difference in facts from earlier order of Co-ordinate Bench but same must be recorded inthe order.<\/p>\n Further not dealing with a decision of the Co-ordinate Bench\u00a0 of the Tribunal\u00a0 cited by the assessee has been held to make the impugned order a non-speaking order and therefore in breach of principles of natural justice. [DSP<\/em><\/strong> Investment Pvt. Ltd.<\/em><\/strong><\/p>\nIssue-1<\/h3>\n
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