LexM/S. GAMMON INDIA LTD. versus COMMISSIONER OF CUSTOMS, MUMBAI
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[2011) 7 S.C.R. 195 M/S. GAMMON INDIA LTD. v. COMMISSIONER OF CUSTOMS, MUMBAI (Civil Appeal No. 5166 of 2003) JULY 6, 2011 [D.K. JAIN AND H.L. DATIU, JJ.] A B Customs Act, 1962: Exemption Notification No. 1712001- cuScdated.1..3.2001 '."'.A~ per .Co.ndition 38 of the Notification, a person who tias been.awarded'a 'contractfor the construction c of roads in India by or on behalf of the NHAI is entitled to exemption from basic customs duty and additional customs duty in respect of specified machines - Appellant and another company entered into a joint venture agreement for submitting a bid for award of a contract for construction of road D on National Highway- Contract given to the said joint venture company - Import of machinery specified in the Notification by appellant - Claim by appellant for exemption under the Notification - Entitlement for - Held: Not entitled - Contract was granted to joint venture company and not to the appellant E - Import of the specified machine by appellant could not be considered to be an import by joint venture company "a person who has been awarded a contract for construction of the roads in India", so as to fulfill Condition No.38, laid down in Exemption Notification No.1712001/Cus - Therefore, F neither appellant nor joint venture company fuifilled the requisite requirement stipulated in Condition No.38 of the Exemption Notification No. 1712001/Cus .. Joint venture: Connotation of - Discussed. Interpretation of statutes: Taxing statutes - Strict construction - Held: A provision providing for an exemption has to be construed strictly. 195 • G . H 196 SUPREME COURT REPORTS [2011] 7 S.C.R.. A Judicial discipline: Precedents - Binding effect - Held: If a Bench of a Tribunal, in identical fact-situation, is permitted to come to a conclusion directly opposed to the conclusion reached by another Bench of the Tribunal on earlier occasion, that would be destructive of the institutional integrity itself - If B 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 to a larger Bench, for which provision exists in the Act itself - A subordinate court c is bound by the enunciation of law made by the superior courts - A Coordinate Bench of a Court cannot pronounce judgment contrary to declaration of law made by another Bench - It can only refer it to a larger Bench if it disagrees with the earlier pronouncement. D The appellant-company (Gammon) and M/s Atlanta entered into a joint venture agreement on 18th September, 2000 for the purposll of submitting a bid to the National Highways Authority of India (NHAI) for award of.a contract for construction of 31.40 Kilometers of road E on National Highway-5. The joint venture was named and styled as "Gammon Atlanta JV". In terms of the agreement, each of the said parties was to share financial responsibilities in the form of guarantees, securities etc. to the extent of 50% of the project value and the venture F was to be managed by setting up of a management board consisting of a Chairman and one Director to be nominated by Gammon and a Joint Chairman and another Director to be nominated by Atlanta. Although Gammon was to be designated as the lead partner to the G venture but both the companies were to be jointly and severally liable to NHAI for due execution of the contract. The bid tendered by the said joint venture was accepted by NHAI and agreement dated 20th December, 2000 was executed between NHAI as the "Employer" on H GAMMON INDIA LTD. v. COMMISSIONER OF 197 CUSTOMS, MUMBAI the one part and M/s Gammon-Atlanta JV as the A "contractor", on the other. On behalf of Gammon-Atlanta JV, the agreement was signed by the representatives of both the companies, i.e. Gammon and Atlanta. On 1st March, 2001, an Exemption notification no.17/2001 cus was issued exempting from basic customs duty and B additional customs duty certain goods required for construction of roads. Gammon imported the specified "Concrete Batching Plant" from Germany and filed Bill of Entry for its clearance at nil rate of duty under the Notification. The Department rejected the claim on the c ground that the exemption was available only if the goods were imported by "a person who has been awarded the contract" by NHAI (or construction
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