M/S. O.N.G.C. LTD. versus COMMNR. OF CUSTOMS, MUMBAI

Citation: [2006] SUPP. 5 S.C.R. 317 · Decided: 24-08-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

' 
MIS. O.N.G.C. LTD. 
A 
v. 
COMMNR. OF CUSTOMS, MUMBAI 
AUGUST 24, 2006 
[S.B. SINHA AND DAL VEER BHANDARI, JJ.) 
B 
Customs Act, 1962-3-D Seismic Tapes-Custom duty on-Exemption 
from-By a Notification-Requirement of Essentiality Certificate for availing 
exemption-Possession of Petroleum Exploration Licence was pre-condition C 
for grant of the Certificate-Late renewal of the licence, but from retrospective 
effect-Due to non-availability of licence, Certificate not granted-After grant 
of licence, fresh application for grant of Certificate in continuance of its 
earlier application-Exemption denied by the Authority as well as Tribunal in 
absence of the Certificate-Certificate produced before this Court after the 
same having been granted-Remission of the case to Tribunal for D 
reconsideration in view of the Certificate-Tribunal denied the exemption, not 
accepting the Certificate-On appeal, held: Once licence was renewed and 
the Certificate was issued, conditions precedent for obtaining exemption in 
terms of the Notification, stood satisfied. 
The appellant company was getting done seismic survey for finding E 
out possibility of oil or gas through another company. The information 
was recorded in 3-D Seismic Tapes. The said Tapes were exempted from 
customs duty in terms of a Notification. For availing exemption, an 
Essentiality Certificate was required to be issued by Directorate General 
of Hydrocarbons. Pre-requisite for grant of such Certificate was a valid F 
Petroleum Exploration Licence. 
Appellant, even before expiry of the Petroleum Exploration Licence 
had applied for its renewal and the same was issued with retrospective 
effect i.e. from the date of expiry of earlier Licence. After issuance of · 
Exemption Notification, appellant applied for Essentiality Certificate, but G 
the same was not granted due to absence of the Licence. After grant of 
Licence, appellant again applied for grant of the Certificate with 
retrospective effect. It also sent several reminders. 
The said goods were cleared provisionally, but show cause notice, 
317 
H 
318 
SUPREME COURT REPORTS (2006] SUPP. 5 S.C.R. 
A denying the exemption, was issued in view of failure to produce the 
Certificate. Customs, Excise and Service Tax Appellate Tribunal decided 
the case against the appellant in view of failure to produce the certificate 
before the Tribunal. In appeal to this Court, appellant produced the 
certificate. This Court, remitted the matter to the Tribunal for 
B reconsideration, holding that grant of the Certificate should be treated as 
proof of the fact that appellant fulfilled the condition for obtaining the 
exemption. 
Pursuant to the directions of this Court, Tribunal passed the order 
holding that the Certificate could not be accepted; that the appellant was 
C guilty of concealment of the fact of return of application for grant of the 
Certificate. Tribunal also attributed malice on the part of the Directorate 
General of Hydrocarbons in granting the Certificate. Hence the present 
appeals. 
D 
Allowing the appeals, the Court 
HELD: I. The Appellant applied for grant of renewal of the Oil 
Exploration Licence before its expiry. The said renewal has bee.n granted 
with a retrospective effect. In law, thus, the Appellant had been holding a 
valid licence continuously. The factual events of the present case clearly 
show that the appellant's application for grant of Essentiality Certificate 
E by the Directorate General of Hydrocarbons was not entertained in 
absence of renewal of the Licence. The application was returned only for 
that purpose. The appellant filed its application for grant of essentiality 
certificate within two days from the date of grant of the Licence with 
retrospective effect and thereafter sent several reminders. The conduct of 
F the appellant must, therefore, be judged from the factual matrix obtaining 
therein. Appellant did not make any misrepresentation before this Court 
or that the Directorate General of Hydrocarbons had shown any favour 
to it. Once it is held that the Ministry of Petroleum had renewed the 
Licence and the Directorate General of Hydrocarbons had issued the 
Essentiality Certificate, the conditions precedent for obtaining exemption 
G in terms of the exemption notification stood fully satisfied; the appellant 
is entitled to the benefits thereof. [323-C-H; 324-AI 
Commissioner a/Customs (Imports), Mumbai v. Tullow India Operations 
Ltd, [20051 13 SCC 789; Tata Iron

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