BHARTI TELECOM LTD. versus COMMISSIONER OF CUSTOMS

Citation: [2001] SUPP. 5 S.C.R. 205 · Decided: 07-11-2001 · Supreme Court of India · Bench: R.P. SETHI · Disposal: Dismissed

Judgment (excerpt)

BHARTI TELECOM LTD. 
v. 
COMMISSIONER OF CUSTOMS 
NOVEMBER 7, 2001 
[R.P. SETHI AND Y.K. SABHARWAL, JJ.] 
Customs Law : 
Duty free goods-Import of-Value Based Advance Licensing Scheme 
(VBALS)-Notification No. 203192 dated 19-5-1992-Exporter imported duty 
free goods under VBALS and claimed exemption under the Notification-Show 
cause notice issued alleging that exporter suppressed fact of availing ofMODVAT 
credit on imports used in manufacture of exported goods for wrongly availing 
duty free benefit against VEALS-Subsequently, Amnesty Scheme introduced 
providing.for amnesty on reversal of MOD VAT credit and payment of interest 
by a certain specified date-Exporter reveresed MOD VAT credit much before 
introduction of Amnesty Scheme but did not deposit interest by the specified 
date-There.fore, Customs duty was imposed on the exporter-Correctness o.f-
Held: The reversal of MOD VAT credit made by the exporter has to be treated 
A 
B 
c 
D 
at par with the reversal of MODVAT credit after introduction of Amnesty 
Scheme-However, interest .for the period between date of export and reversal 
E 
of MODVATcredit has to be deposited by the specified date-Since this was not 
done Customs duty rightly imposed-Central Excise Rules, 1944, Rr. 56-A and 
57-A. 
Interpretation qf Statutes : 
Rule of Construction-Taxing Statute-Held : Provisions of a taxing 
statute are to be interpreted strictly-The language of the statute should govern 
the matter i.e. by the plain terms of the exemption. 
F 
The appellant imported Polypropylene under the Value Based Ad-
G 
vance Licensing Scheme (VBALS) and availed of dnty free clearance of the 
goods claiming exemption under Notification No. 203/92 dated 19-5-1992. 
The Customs Department by a show cause notice alleged that the appel-
lant had suppressed the fact that it had availed of MODV AT credit on the 
inputs used in the manufacture of the exported goods for wrongly availing 
H 
205 
206 
SUPREME COURT REPORTS 
[2001] SUPP. 5 S.C.R. 
A 
duty free benefit against the licence. The Central Board of Excise and 
Customs introducted an Amnesty Scheme providing amnesty on reversal 
of MODVAT credit and payment of interest where exports were effected 
under the VBALS before a certain specified date. Th.e appellant had 
reveresed the MODVA T credit much before the introduction of the Am· 
B 
nesty Scheme but deposited the interest only after the specified date. The 
respondent found that the apellant did not fulfil the conditions of the 
Amnesty Scheme. The show cause notice was, therefore, confirmed impos-
ing customs duty and also the interest and penalty. 
c 
The appeal filed by the appellant before the Customs, Excise & Gold 
(Control) Appellate Tribunal partially succeeded inasmuch as order of the 
respondent imposing penalty and demanding interest was set aside, but it 
was confirmed in respect of demand of duty liability. Hence this appeal. 
On behalf of the appellant it was contended that the respondent was 
D 
not justified in denying the benefit of the Amnesty Scheme to the appellant 
on the ground that it had reversed the MODVAT credit earlier than the 
enforcement of tt.e Scheme; and that it was not reasonably possible for the 
appellant to segregate imports utilised in the manufacture of the dutiable 
final product. 
E 
F 
Dismissing the appeal, the Court 
HELD : 1. The Amnesty Scheme recognises the already reversed 
MODVAT credits. The reversal of credit made by the appellant much 
before the introduction of the Amnesty Scheme has to be treated at par 
with the reversal of credits made by exporters after coming into force of 
the Amnesty Scheme. [209-C] 
2. According to the Amnesty Scheme, the interest for the period 
between the date of export, and the date of reversal of MODV AT credit 
G 
has to be deposited by a certain specified date. It was not deposited by the 
said date. There is no provision for relaxation or extension of time to 
deposit the amount of interest. Such schemes or exemption notifications 
have to be strictly construed. The provision in the notification for deposit 
of interest by a specified date has to be interpreted strictly in the manner 
H 
stated in the notification and on no other basis. It is well settled that in a 
• .. 
BHARTI TELECOM LTD. v. COMMR. OF CUSTOMS [SABHARWAL, J.] 
207 
taxing statute, there is no room for any intendment and regard must be 
A 
had to the clear meaning of the words and that the matter should be 
governed only by the langu

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