M/S. IVRCL INFRASTRUCTURE & PROJECTS LTD.versusCOMMISSIONER OF CUSTOMS, CHENNAI

                      [2015]4S.C.R.1



   M/S. IVRCL INFRASTRUCTURE & PROJECTS LTD.                    A

                              v.

        COMMISSIONER OF CUSTOMS, CHENNAI

              (Civil Appeal No. 5282 of 2004)                   B

                      APRIL 15, 2015'

          [A. K. SIKRI AND R. F. NARIMAN, JJ.]

        Customs Act, 1962 - ss. 25, 108- Customs duty and
                                                                c
additional duty- Exemption - Import of hot mix plant for the
purpose of construction of roads in the State - Purchase order
split between two companies, one was to supply critical items
required for the setting up of the plant and other was to supply o
various containers, frames, ducting, tanks and a thraw belt
conveyer- Claim of exemption from the payment of customs
duty and additional duty - Commissioner and CESTAT
auth0rities holding that a complete.plant in an unassembled
form had not been imported, thus, exemption notification E
would not apply- Interference with - Held: Not called for-
Hot mix plant of the type mentioned alone is exempted from
payment of customs duty- Such plant in its entirety must be
imported in an unassembled form - Reliance on the
statements made by representatives of the companies to the F
custom officer that the imported plant did not have the
essential characteristics of hot mix plant not unwarranted in
law, since the statements are admissible in evidence u!s. 108
- Thus, both the oral and the documentary evidence lead to G
the same conclusion that what was imported was not hot mix
plant that was complete in itself- Custom Tariff Act, 1975- r
2(a).

       Dismissing the appeal, the Court
                                                                H
                             1
2        SUPREME COURT REPORTS                [2015] 4 S.C.R.

A         HELD: 1.1 Judged by the test that whereas
  eligibility criteria laid down in an exemption notification
  are required to be construed strictly, once it is found that
  the applicant satisfies the same, the exemption
  notification should be construed liberally, it is clear that
B a hot mix plant of the type mentioned alone is exempt
  from payment of customs duty. It is meant that such plant
  in its entirety must be imported albeit in an unassembled
  form. Judged by this test, it is clear that the concurrent
C findings of fact of the Commissioner and the CESTAT
  requires no interference by this Court inasmuch as both
  authorities have held that a complete plant in an
  unassembled form has not in fact been imported. [Para
  4] [15-B-D]
D
      Commissioner of Customs {Imports), Mumbai v. Tullow
      India Operations Ltd. (2005) 13 SCC 789: 2005 (4)
      Suppl. SCR 973; G.P. Ceramics Private Limited v.
      Commissioner, Trade Tax, UttarPradesh (2009) 2 SC~
E     90: 2008 (16) SCR 315- relied on.

          1.2 Statements made to an Officer of Customs are
    admissible in evidence under Section 108 of the Customs
    Act, 1962. The Court has merely to scrutinize whether
F the admissions made were voluntarily or otherwise. In
  the instant case, it is clear that unretracted statements
  made by none other than the Vice President of the
  appellant company, representatives of M Company, and
  a representative of National Highways Authority of India,
G to the effect that the imported goods were only
  components and had not attained the essential
  characteristics of a plant having never been retracted
  later, were made voluntarily. Reliance on the said
  statements, therefore, by the authorities below cannot
H
  M/S IVRCL INFRASTRUCTURE & PROJECTS LTD. v.                  3
         COMMR. OF CUSTOMS, CHENNAI

be said to be unwarranted in law. [Para 5] [15-H; 16-A-C] A

       1.3 The counsel for the appellant relied upon a
letter dated 18.1.2002 written by the Vice President of
the appellant to the Chief Commissioner of Customs,
Chennai and another letter dated 20.1.2002 by National         B
Highways Authority of India to the Chief Commissioner
of Customs, Chennai. A perusal of these letters would
also show that what had to be manufactured in India
would alone ultimately go to make up a complete plant.
This is clear from a statement made in the letter dated        C
18.1.2002 that what has been imported is "the basic
character" of the hot mix plant and not a complete plant
as it is clear that what is manufactured indigenously
would alone ultimately complete the plant. Further,
                                                               0
representative of the National Highways Authority of
India admitted that a complete plant had not been
imported and that the imported components did not have
the essential characteristics of a hot mix plant. Thus, both
the oral evidence and the documentary evidence                 E
ultimately lead to the same conclusion: namely, that
what was imported was not a hot mix plant that was
complete in itself. [Para 5] [16-E-F; 17-F, G-H; 18-A-B]

  Gu/am Hussain Shaikh Chougule v. S. Reynolds,                F
  Supdt. of Customs, Marmgoa 2001 (4) Suppl.
  SCR 476: (2002) 1 sec 155 - relied on.

                  Case Law Reference

2005 (4) Suppl. SCR 973           relied on     Para 4         G

2008 (16) SCR 315                 relied on     Para 4

2001 (4) Suppl. SCR 476           relied on     Para 5
                                                               H
                                                                   \
 4           SUPREME COURT REPORTS                        [2015] 4 S.C.R.



A          CIVILAPPELLATE JURISDICTION: Civil Appeal No.
     5282 of2004

            From the Judgment :ind Order No. C/186/2004-B dated
     25.02.2004 of the Customs, Excise and Service Tax Appellate
B    Tribunal, New Delhi in Appeal No. C/699/2002-B

             V. Lakshmikumaran, M. P. Devanath, Vivek Sharma,
     S. Vasudevan, Hemant Bajaj, Ambarish Pandey, Shagun
     Arora,Aditya Bhattacharya,Anandh K., Rajesh Kumar for the
C    Appellant.

             Pinky Anand, ASG, Arijit Prasad, Rashmi Malhotra,
     Kritika Sachdeva, B. Krishna Prasad forthe Respondent.

             The Judgment of the Court was delivered by
D
         R. F. NARIMAN, J. 1. The facts necessary to decide
  this appeal are as follows. The appellant entered into a Joint
  Venture Agreement with Mis Shapoorji Pallonji & Company
  Limited for the purpose of construction of roads in the State of
E Andhra Pradesh. The Joint Venture was awarded a contract
  by the National Highways Authority of India for construction of
  roads as a part of the Golden Quadrilateral, Phase-2 Project
  inAndhra Pradesh.
F        2. Vide a notification dated 1.3.2001, in exercise of
  powers under Section 25( 1) of the Customs Act, certain items
  were exempted from payment of customs duty and additional
  duty leviable under the Customs Tariff Act. We are concerned
G with serial No.217 of this notification which reads as follows:


     "217.   84 or any other Goods specified in List 11       Nil Nil 38
             Chapter         required for construction
                                     of roads."
H
 M/S IVRCL INFRASTRUCTURE & PROJECTS LTD. v.                          5
COMMR. OF CUSTOMS, CHENNAI [R. F. NARIMAN, J.]

The conditions by which the exemption is attracted is set             A
out in item 38 as follows:

  "38. If,-

  (a) the goods are imported by-
                                                                      B
     (i)      the Ministry of Surface Transport, or

     (ii)     a person who has been awarded a contract for
               the construction of roads in India by or on behalf
               of the Ministry of Surface Transport, by the           c
               National Highway Authority of India, by the Public
               Works Department of a State Government or by
               a road construction corporation under the control
               of the Government of a State or Union Territory;
                                                                      D
               or

     (iii)     a person who has been named as a sub-
               contractor in the contract referred to in (ii) above
               for the construction of roads in India by or on
               behalf of the Ministry of Surface Transport, by
                                                                      E
               the National Highway Authority of India, by Public
               Works Department of a State Government or by
               a road construction corporation under the control
               of the Government of a State or Union Territory;       F
  (b) the importer, at the time of importation, furnishes an
  undertaking to the Deputy Commissioner of Customs or .
  the Assistant Commissioner of Customs, as the case
  may be, to the effect that he shall use the imported goods
                                                                      G
  exclusively for the construction of roads and that he shall
  not sell or otherwise dispose of the said goods, in any
  manner, for a period of five years from the date of their
  importation; and ·
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 6         SUPREME COURT REPORTS                   [2015] 4 S.C.R.



A      (c) in case of goods of serial nos. 12 and 13 of List 11,
       the importer, at the time of importation of such goods,
       also produces to the Deputy Commissioner of Customs
       or the Assistant Commissioner of Customs, as the case
       may be, a certificate from an officer not below the rank of
B      a Deputy Secretary to the Government of India in the
       Ministry of Surface Transport (Roads Wing), to the effect
       that the imported goods are required for construction of
       roads in India."

c            List 11 with which we are concerned contains several
     entries. We are concerned with Entry No.1 which reads as
     follows:

       "(1) Hot mix plant batch type with electronic controls and
D      bag type filter arrangements more than 120 T/hour
       capacity."

          A purchase order was placed by the appellant on M/s
  Lintec GmbH &Co.KG, Germany, for supply of a hot mix plant
E for a total value of 906,574 DM. Lintec and the appellant
  decided to split the purchase order between Lintec, Germany
  and M/s Marshalls, Chennai. Lintec was now to receive a total
  value of 585, 700 DM and Marsh alls was to receive the balance.
  Lintec was to supply the "critical items" required for the setting
F up of the said plant, whereas Marshalls was to supply various
  containers, frames, ducting, tanks and a thraw belt conveyer
  apart from agreeing to set up the plant after it is imported.
  Vide a Bill of Entry dated 28.12.2001, the import of equipment
G from M/s Lintec was made by the appellants, who claimed that
  the said items fell within the scope of the exemption notification
  dated 1.3.2001 and, therefore, were exempt from payment of
  customs duty on the same. The Customs Authorities, however,
  maintained that what was imported was not a hot mix plant but
H only certain parts of such plant and, therefore, the exemption
  M/S IVRCL INFRASTRUCTURE & PROJECTS LTD. v.                     7
 COMMR. OF CUSTOMS, CHENNAI [R. F. NARIMAN, J.]

notification would not apply. Various representations were then   A
made to the Chief Commissioner of Customs to allow the
goods into India without payment of customs duty. On
22.2.2002 the goods were assessed provisionally and then
allowed to be cleared. By an order of the same date, the
Commissioner of Customs held that the exemption notification      B
did not apply for two reasons. As per condition 38 of the said
notification, imports have to be made by a Joint Venture
Company and not by one of the partners of the said company.
Secondly, the exemption applies to a complete plant that is       C
imported and not to parts/components of such a plant. The
Commissioner, therefore, held:-

  "14.2 Coming to the issue whether the goods imported
  are the complete plant or not, I find that M/s. IVRCL,
                                                                  D
  placed an order for the supply of the whole plant on M/s.
  Marshall- Lintec, Chennai, (a Joint Venture collaboration
  between M/s. Marshall & M/s. Lintec, Germany). M/s.
  Marshall - Lintec, Chennai, entered into an agreement
  with Mis. IVRCL, for the supply, erection and                   E
  commissioning of the plant. Therefore, the order placed
  on M/s. Marshall - Lintec, Chennai, was terminated since
  the Joint Venture Company was not finally formed and
  separate orders were placed on M/s. Lintec, Germany,
  and M/s. Marshall. M/s. Lintec, Germany was to supply           F
  certain components and one part of the plant in a fully
  assembled container and M/s. Marshall were to
  manufacture the indigenous components and assemble
  the imported components and the indigenous
  components in the indigenously manufactured containers.         G
  Further, the scope of supply included testing, erection
  and commissioning_ of the plant by M/s. Marshall. The
  cost of the plant is divided in the ratio approximately
  60:40 between the partners M/s. Lintec, Germany and
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8      SUPREME COURT REPORTS                     [2015] 4 S.C.R.


A   M/s. Marshall.

    14.3 Further the agreement includes the cost of
    transportation of the imported components to the factory
    of M/s. Marshall. As per their Technical Transfer Contract,
B   M/s. Lintec supplied the drum assembly and the
    components for the manufacture of the plant by M/s.
    Marshall. No separate agreement had been entered
    either by the principal or the local representatives with
    the importer M/s. IVRCL. I find that the principal and the
c   local representative of the supplier as per their discussion
    and communications with the importer, had arranged to
    raise the import docu'"!lents by describing the goods as
    a complete plant though the goods supplied are only the
    drum assembly and components. The examination of
D
    the imported goods confirmed that out of 11 segments
    of the whole plant to be supplied in a fully assembled
    condition to the importers, only one assembled segment
    viz. drum container covering the screening and drying
E   drum had been supplied apart from the components in
    another commercial container.

    14.4 I also find that Shri S. Ramachandran, Sr. Vice
    President of the importing firm has clearly admitted, in
F   his voluntary statement dated 03.01.2002 that the goods
    imported were not a complete plant and once assembled
    with the indigenous components would form a complete
    plant. Though he claimed that he had given the statement
    dated 03.01.2002 under duress, in his subsequent
G   statement given on 21.02.2002, he again admitted that
    imported goods were only components and they have
    not attained essential characteristics of a plant.

    14.5 Further I find that Shri M.V. Narasimha Rao, Project
H   Director of NHAI, with reference to the exemption
  M/S IVRCL INFRASTRUCTURE & PROJECTS LTD. v.                       9
 COMMR. OF CUSTOMS, CHENNAI [R. F. NARIMAN, J.]

   certificate issued by them, after careful scrutiny of the        A
   related import documents and also the examination
   proceedings dated 24.01.2002, has clarified that the
   goods under import were not the complete plant and that
   the imported components did not have the essential
   characteristics of the plant.                                    B

   14.6 Under Notification No.17/2001, that the benefit of
   duty exemption is available only for the import of the plant
   in full either in CKD or SKD conditiun. The subject import
   can be considered only as a part of the plant. Therefore,        c
   the goods under import are not eligible for the duty
   exemption as provided under the Notification No.17/
   2001."

        3. An appeal was carried by the appellant to CESTAT         D
which set aside the Commissioner's reasoning on condition
38 of the notification. It held that there was in fact no Joint
Venture Company formed and the Joint Venture between the
appellant and M/s Shapoorji Pallonji & Company Limited was
in the nature of a partnership, in which case any of the partners   E
could import goods covered by the exemption notification.
However, it agreed with the Commissioner that what had in
fact been imported was not a complete plant and, therefore, it
would follow that the exemption notification would not be           F
available on this score. CESTAT held:-

  "10. The next issue is whether the goods imported and
  cleared under the Bill of Entry filed by IVRCL were eligible
  for the benefit of exemption in terms of Sr. No.217 of the
                                                                    G
  Table (read with Item No.(1) in List-11) annexed to the
  Notification. It is settled law that an exempting provision
  under a taxing statute requires to be construed strictly
  vide Novopan India (supra) wherein the apex Court held
  that a person invokinq an exempting provision to relieve          H
10       SUPREME COURT REPORTS                      [2015] 4 S.C.R.



A      him of tax liability must establish clearly that he is covered
       by the said provision and that, only in the case of doubt
       or ambiguity, the benefit thereof must go the State. If the
       goods in question satisfy the description given at Item
       No.(1) in List-11, it will be eligible for the exemption. The
B      description reads : "Hot mix plant batch type with
       electronic controls and bag type filter arrangement 160
       tons per hour capacity. "The Revenue has argued that a
       complete hot mix plant was not imported and that only
       some components thereof were imported. The appellants
c      have contended that, barring some steel structures, all
       the essential components of hot mix plant were imported
       in terms of purchase order placed on the German
       supplier. We have come across two purchase orders in
0      the file, marked as Annexures-4 and 6 of the
       memorandum of appeal, both identically numbered and
       identically dated (No.11 dated 21.7.2001). The
       Annexure-4/purchase order shows an amount of OM
       906,574 while Annexure-6/purchase order shows an ·
E    . amount of OM 550,000 as the total price of what is
       described as "hot mix plant (batch type) CSO 2500, CAP
       160 tons per hour as per specifications enclosed". It
       has been claimed by the appellants that the amount shown
       inAnnexure-6/purchase order is the final price as settled
F      through negotiations with the German Supplier. We have
       already noted that both the purchase orders are identically
       numbered and identically dated. Any negotiation
       between IVRCL and the Germany supplier should have
       taken place on 21. 7.2001 itself. No evidence of any such
G
       negotiation is available on record. We have also come
       across the work order issued by IVRCL to M/s Marshall
       Sons & Co. (Mfg.) Ltd., Chennai. This work order gives
       the following description of work: "assembling of
H      equipment supplied by Lintec vide P.O. No. SRP/CAP/
 MIS IVRCLINFRASTRUCTURE & PROJECTS LTD. v.                       11
COMMR. OF CUSTOMS, CHENNAI [R. F. NARI MAN, J.]

 11/2K1-02 dated 21.7.2001 and also supply and erection           A
 of own structures as mentioned in Annexure". The total
 cost of work shown in the work order is OM 356,574.
 We note that the amount shown in Annexure-4/purchase
 order is the arithmetical sum of the amounts shown in
 Annexure-6/purchase order and Annexure-7/work order              B
 and, further, that the description of work allotted to
 Marshall includes supply and erection of structures, apart
 from assembling of the equiprtients supplied by Lintec.
 It is clear from these facts that some of the components
                                                                  c
 viz. structures for the hot mix plant were supplied by
 Marshall, that the amount paid to them towards cost of
 such components and cost of assembling of Hot Mix Plant
 was OM 356,574, that the amount paid by IVRCL to Lintec
 for the components supplied by the latter was DM                 D
 550,000 and that the total cost of the hot mix plant as
 erected at the project site was OM 906,574. Lintec's
 letter to IVRCL vide Annexure-5 itself had called upon
 the appellants to place the necessary order with Marshall
 for their share of the deal of setting up hot mix plant. Only    E
 9 containers were listed in the first annexure to that letter,
 which represented the "Lintec scope of supply". The
 second annexure to the letter, representing the "Marshall
 scope of supply'', mentioned 2 containerised items
 besides structural parts. The documentary evidence is            F
 squarely in support of the Commissioner's finding that
 only some components of hot mix plant were imported
 from Germany by the appellant-company.

 11. Coming to the oral evidence under Section 108 of             G
 the Customs Act, we note that it was stated by Sh. P.S.
 Banik of Marshall that they were the Indian agents of
 Lintec for sale of hot mix plants in India and that, as per
 orders received from IVRCL, they had provided bitumen
                                                                  H
12        SUPREME COURT REPORTS                    [2015] 4 S.C.R.


A     tanks and storage silo (containers with internal
      fabrication) and other structural fabrications for the hot
      mix plant in question. He also stated that the plant
      consisted of 11 containerised sections, of which a few
      were provided by Marshall. Sh. J. Bhattacharjee of
B     Marshall stated that the components manufactured
      indigenously were essential for the function of the plant.
      Sh. S. Ramachandran of IVRCL himself admitted that
      the plant was not complete without addition of the
      indigenous items. Shri M.V.N. Rao of NHAI stated, after
c     examining the import documents, that the complete plant
      had not arrived and that the imported components did
      not have the essential characteristics of hot mix plant.
      All these statements - none of them retracted or
D     controverted - coupled with the documentary evidence
      would prove beyond doubt that the goods imported by
      IVRCL did not represent anything with essential character
      of a hot mix plant, let alone a complete plant, to satisfy
      the description at Item No. (1) of List-11 under the
E     Notification. Therefore, we are unable to accept the
      counsel's argument that the imported goods should be
      treated as 'hot mix plant unassembled.' What was
      exempted from import duty in terms of Sr. No.217 read
      with Item No.(1) of list 11 under the Notification was a
F     complete hot mix plant fully described at the said Item
      No. (1) and not some components thereof. There can
      be no doubt or ambiguity with regard to the description
      of goods at the said Item No. (1 ).''

G         4. Shri Lakshmikumaran, learned counsel who
  appeared on behalf of the appellant has argued that Rule 2(a)
  of the general rules for the interpretation of the schedule to the
  Customs Tariff Act would make it clear that so long as
H essentially the plant in question had been imported, merely
  M/S IVRCL INFRASTRUCTURE & PROJECTS LTD. v.                      13
 COMMR. OF CUSTOMS, CHENNAI [R. F. NARIMAN, J.J

because all items that go into the making of such plant were A
not imported would not matter. Further, it is clear that such
imports can also be made in unassembled form. His further
argument was that the plant as a whole had been imported
and only structural work had to be done by Marshalls in India
and, therefore, the benefit of the exemption notification would B
be available. Ms. Pinky Anand, learned Additional Solicitor
General countered these submissions and argued that there
are concurrent findings of fact by both the Commissioner and
the CESTAT that what was in fact imported was not the C
complete plant and since that was so, the benefit of the
exemption notification would not be available. She further
pointed out that there were various admissions made by the
appellant as well as by persons who deposed on their behalf
which would show that in any case even the essential portions o
of the plant had not been imported.

        We have heard learned counsel for the parties. We
find that the first argument made by Shri Lakshmikumaran can
be disposed of immediately. The subject matter before us is        E
an exemption notification issued under Section 25 of the
Customs Act, 1962. The interpretative notes that have been
referred to by Shri Lakshmikumaran are in the Customs Tariff
Act. Note 2(a) referred to by Shri Lakshmikumaran reads as
follows:                                                           F

  "2. (a)       Any reference in a heading to an article shall
  be taken to include a reference to that article incomplete
  or unfinished, provided that, as presented, the incomplete
  or unfinished article has the essential character of the         G
  complete or finished article. It shall also be taken to
  include a reference to that article complete or finished
  (or falling to be classified as complete or finished by virtue
  of this rule), presented unassembled or dis-assembled."
                                                                   H
14        SUPREME COURT REPORTS                       [2015] 4 S.C.R.


A         It is clear that such note will have no application to an
  exemption notification which is issued under Section 25 of the
  Customs Act. Therefore, the fact that an unassembled plant
  which is incomplete but which has the essential character of a
  complete plant is not the test to be applied in the present case.
B On the other hand, the applicable test would be.what has been
  laid down in a catena of decisions. Two such decisions will
  suffice. In Commissioner of Customs (Imports), Mumbai
  v. Tullow India Operations Ltd., (2005) 13 SCC 789, this
C Court held:

       "34. The principles as regards construction of an
       exemption notification are no longer res integra; whereas
       the eligibility clause in relation to an exemption notification
       is given strict meaning wherefor the notification has to
D
       be interpreted in terms of its language, once an assessee
       satisfies the eligibility clause, the exemption clause
       therein may be construed liberally. An eligibility criteria,
       therefore, deserves a strict construction, although
E      construction of a condition thereof may be given a liberal
       meaning."

             Similarly in G.P. Ceramics Private Limited v.
     Commissioner, Trade Tax, Uttar Pradesh, (2009) 2 SCC
F    90, this Court held:-

       "29. It is now a well-established principle of law that
       whereas eligibility criteria laid down in an exemption
       notification are required to be construed strictly, once it
       is found that the applicant satisfies the same, the
G
       exemption notification should be construed liberally.
       [See CTTv. DSM Group of Industries [(2005) 1 SCC
       657] (SCC para 26); T1sco v. State of Jharkhand [(2005)
       4 SCC 272j (SCC paras 42 to 45); State Level
H      Committee v. Morgardshammar India Ltd. [(1996) 1
  M/S IVRCL INFRASTRUCTURE & PROJECTS LTD. v.                       15
 COMMR. OF CUSTOMS, CHENNAI [R. F. NARI MAN, J.]

   SCC 108]; Novopan India Ltd. v. CCE &Customs [1994                A.
   Supp (3) SCC 606] ; A.P Steel Re-Rolling Mill
   Ltd. v. State of Kera/a [(2007) 2 SCC 725] and Reiz
   Electrocontrols (P) Ltd. v. CCE [(2006) 6 SCC 213].]"

         Judged by this test, it is clear that a hot mix plant of the B
type mentioned alone is exempt from payment of customs duty.
Obviously, what is meant is that such plant in its entirety must
be imported albeit in an unassembled form. Judged by this
test, it is clear that the concurrent findings of fact of the
Commissioner and the CESTAT requires no interference by C
this Court inasmuch as both authorities have held that a
complete plant in an unassembled form has not in fact been
imported. Further, both authorities have relied upon statements
made by none other than the Vice President of the Appellant
                                                                      0
who after retracting a statement made on 3.1.2002 has made
a subsequent statement on 21.2.2002 admitting that the
imported goods were only components and had not attained
the essential characteristics of a plant. The subsequent
statement has not been retracted. Further, Shri P.S. Banik an E
employee of Marshalls also made a statement that the plant in
its entirety consisted of 11 containerised sections of which a
few were indigenously produced by Marshalls. Shri
Bhattacharjee also an employee of Marshalls added that what
was manufactured indigenously was essential for the F
functioning of the plant. Further, Shri M.V.N. Rao, of the National
Highways Authority of India stated that a complete plant had
not been imported and that the components of such plant which
were imported did not have the essential characteristics of a
hot mix plant.                                                        G

       5. It is settled law that statements made to an Officer of
Customs are admissible in evidence under Section 108 of
the Customs Act, 1962. This Court has held in Gulam Hussain
                                                                     H
16         SUPREME COURT REPORTS                    [2015] 4 S.C.R.



A    Shaikh Chougule v. S. Reynolds, Supdt. of Customs,
     Marmgoa, (2002) 1 sec 155, after quoting from several other
     judgments, that such statements are admissible in evidence.
     The Court has merely to scrutinize whether the admissions
     made were voluntarily or otherwise. In the present case, it is
B    clear that unretracted statements made by none other than the
     Vice President of the appellant company, representatives of
     Marshalls, and a representative of National Highways Authority
     of India, having never been retracted later, were made
C    voluntarily. Reliance on the said statements, therefore, by the
     authorities below cannot be said to be unwarranted in law.

             Shri Lakshmikumaran in a written submission has
     accepted that statements given under Section 108 are
     admissible as evidence. However, he has cited a number of
D    authorities to the effect that when such statements are in direct
     conflict with documentary evidence, the latter should be given
     greater weight.

             Thus, he relied upon a letter dated 18.1.2002 written
E    by the Vice President of the appellant to the Chief
     Commissioner of Customs, Chennai and another letter dated
     20.1.2002 by National Highways Authority of India to the Chief
     Commissioner of Customs, Chennai. A perusal of these letters
F    would also show that what had to be manufactured in India
     would alone ultimately go to make up a complete plant. This
     is clear from a statement made in the letter dated 18.1.2002
     to the following effect:

        "The above mentioned items shall be assembled in the
G
        indigenously procured steel structural container to make
        up the complete mixture container."

             However, Shri Lakshmikumaran relied upon the
H    following statements in the said letter:
  M/S IVRCL INFRASTRUCTURE & PROJECTS LTD. v.                      17
 COMMR. OF CUSTOMS, CHENNAI [R. F. NARIMAN, J.]

  "We wish to mention at this stage that the steel structures      A
  which include containers, tank and storage silo are low
  technology fabrications and do not form essential
  components/ parts to the main Hot Mix Plant systems
  and import of such items from Foreign Country shall
  unnecessarily result in outflow of valuable foreign              B
  exchange for the country.

       We wish to reiterate that we have not compromised
  with regard to importing the major essential
  characteristics of the plant thereby keeping the character       c
  of the hot mix plant unchanged."

This, however, has to be read with the following statement
made in the same letter.
                                                                   D
  'We however strongly feel that our company has genuinely
  imported the basic character of the hot mix plant as
  explained in detail to the concerned officer of the SllB
  and are eligible for availing duty exemption as per
  Notification No.17 of March, 2001 as originally filed in         E
  our Bill of Entry."

       It is clear that on a holistic reading of the said letter
what has been imported is "the basic character" of the hot mix
plant and not a complete plant as it is clear that what is         F
manufactured indigenously would alone ultimately complete
the plant.

        Equally the letter dated 20.1.2002 being a letter by the
National Highways Authority of India does not take us much G
further. In fact, as has been pointed out above, Shri M.V.N.
Rao of the said authority candidly admitted that a complete
plant had not been imported and that the imported components
did not have the essential characteristics of the hot mix plant
                                                                   H
18           SUPREME COURT REPORTS                 [2015] 4 S.C.R.


A    in question. In the present case, both the oral evidence and
     the documentary evidence ultimately lead to the same
     conclusion: namely, that what was imported was not a hot mix
     plant that was complete in itself.

B            6. It may be pointed out that CESTAT has already given
     the appellant considerable relief. The redemption fine of
     Rs.5,00,000/- imposed bythe Commissioner was reduced to
     a fine of Rs.1,00,000/- and a penalty of Rs.1,00,000/- imposed
     by the appellant has also been set aside. In the circumstances,
C    the appeal is dismissed with costs of Rs.1,00,000/-.

     Nidhi Jain                                     Appeal dismissed.