COMMISSIONER OF CUSTOMS (IMPORTS), MUMBAI versus M/S. TULLOW INDIA OPERATIONS LTD.

Citation: [2005] SUPP. 4 S.C.R. 973 · Decided: 28-10-2005 · Supreme Court of India · Bench: B.P. SINGH · Disposal: Disposed off

Judgment (excerpt)

~ 
COMMISSIONER OF CUSTOMS (IMPORTS), MUMBAI 
A 
v. 
MIS. TULLOW INDIA OPERATIONS LTD. 
OCTOBER 28, 2005 
(B.P. SINGH AND S.B. SINHA, JJ.] 
B 
Customs Act, 1962 : 
Exemption Notification No. 20199-cus dated 28.02.1999-For availing c 
the benefit of Notification, the importer is required to produce the essentiality 
certificate at the time of import-If issuing authority fails to issue the certificate 
in time then importer cannot be denied the entitlement merely on this ground. 
Interpretation of statutes : 
Exemption Notification not to be construed in a wcry which would prove D 
to be oppressive in nature-Eligibility criteria to be construed strictly although 
construction of a condition may be given a liberal meaning. 
Public Functionary : 
Directorate General of Hydrocarbons-Authority to issue essentiality E 
certificate-Delay in issuing the certificate-Held: Authority must dispose of 
application for grant of essentiality certificate within reasonable time so as to 
enable the importer to avail benefit of Notification. 
ONGC is engaged in the business of exploration and exploitation of F 
oil and gas. For exploring oil/gas, contracts are awarded to the companies 
to carry out seismic survey. In pursuance of the said contracts, a seismic 
vessel was brought to India by the contractor for carrying on seismic 
survey. For the purpose of recording data of the surveys, magnetic tapes 
were also imported. 
G 
The Notification No.20/99-cus dated 28.2.1999 exempted custom duty 
on goods imported in connection with petroleum operations. For claiming 
"" 
exemption .under said Notification, the importer is required to produce to 
the custom authorities at the time of importation, essentiality certificate 
... 
973 
H 
974 
SUPREME COURT REPORTS (2005] SUPP. 4 S.C.R. 
A from Directorate General of Hydro carbons. 
B 
ONGC had applied for essentiality certificate but could not produce 
same at the time of import as the same had not been then granted. As a 
result, the provisional clearance of tapes was made. 
Custom authorities issued notice to ONGC asking as to why custom 
duty and penalty be not imposed on them for misdeclaring the value of 
data tapes. Adjudicating authority held that the ONGC had misdeclared 
the value of data tapes and is liable to pay custom duty thereon and penalty 
amount. Respondent and ONGC filed appeal before the Tribunal. 
C Respondent had claimed that they were entitled to the benefit of 
Notification No. 20/1999-cus. 
Respondent had also applied and was granted essentiality certificate. 
Whereas Tribunal dismissed the appeal of ONGC on the ground that 
essentiality certificate had not been produced, it allowed the appeal of 
D respondent and remanded the matter back to Commissioner for his 
consideration regarding availability of the exemption. The order of 
Tribunal is challenged by ONGC and Commissioner of Customs. 
Disposing of the appeal and remitting the matter to Commissioner, 
E the Court 
HELD: I.I. The importers .are licensees. Indisputably, they were 
entitled to the benefit of the exemption notification, subject to the condition 
that they would produce the essentiality certificate granted by the 
Directorate General of Hydrocarbons at the time of importation of goods. 
F The essentiality certificate admittedly was not granted by the Directorate 
General of Hydrocarbons within a reasonable time. Therefore, importers 
could not be blamed therefor. [984-D[ 
1.2. The Directorate General of Hydrocarbons is under the Ministry 
of Petroleum and Natural Gas of the Government of India. The functions 
G performed by it are public functions. The notification never contemplated 
that a public functionary, having regard to the importance·ofthe subject 
matter and in particular when such importations are being made in public 
interest, would not dispose of the application for grant of essentiality 
certificate within a reasonable time so as to enable the importer to avail 
H the benefit thereof. Applications for grant of such certificates, having 
, 
COMMISSIONER OF CUSTOMS (IMPORTS!, MUMBAI"· TULLOW INDIA OPERATIONS LTD. 
975 
regard to their importance, should have been processed by the Directorate A 
General of Hydrocarbons as expeditiously as possible but they did not 
ctioose to do so probably having regard to the fact that no time schedule 
therefor was prescribed. [985-D, E, F,J 
P. r Rajan v. TP.M Sahir and Ors. (2003) 8 SCC 498 and Punjab State 
Electricity Board Ltd v. Zora Singh and Ors

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