In Commissioner of Customs vs. Mahavir Roads & Infrastructure Pvt. Ltd, the Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that contracts awarded, prior to 2012, budget by Mumbai Metropolitan Regional Development Authority (MMRDA ) cannot avail the benefit of customs duty exemption on road construction equipment.
In the instant case an appeal has been filed against the order of the Commissioner (Appeals) by the Revenue. The Commissioner (Appeals) had held the view that Mumbai Metropolitan Regional Development Authority (MMRDA) is a road construction corporation under the control of the State Government. It was while interpreting Notification No. 21/2002, the Commissioner pointed out that condition No. 40 (ii) of Notification No. 21/2002 Sr. No. 230 also grants exemption to a person who has been awarded a contract for the construction of roads in India by a road construction corporation under the control of the government of a State or Union Territory.
Aggrieved, the Revenue filed appeal before the CESTAT. The Counsel for the Revenue argued that the eligible Department have been specifically named in the notification, covering only those which are part of and/or under the control of Central/State Government and Union Territories are eligible for the exemption He argued that the notification has to be strictly read and interpreted.
The Counsel for the Respondent argued that MMRDA was established under the Mumbai Metropolitan Regional Development Authority Act, 1974 and therefore a road construction corporation under the control of the State Government. He relied on the Commissioner’s order.
The Bench comprising of Judicial Member Archana Wadhwa and Technical Member Raju found that the said issue was already decided by the Tribunal in the case of Shreeji Construction vs. Commissioner of Customs (Import). In that case the Tribunal had observed that the prior to the 2012 budget the exemption notification differentiated between a Metropolitan Development Authority and a Road construction corporation.
“Otherwise there was no need to specify both these agencies as the persons who can award the contract for the purpose of the Notification. If the intention was to consider Metropolitan Development Authority as a Road construction corporation, the language used would have been different – for e.g. a road construction corporation including a Metropolitan Development Authority or by way of an explanation. That has not been done in the instant case.” remarked the Tribunal.
Relying on the decision of the Tribunal, the Bench held that the contracts awarded by MMRDA did not qualify for the exemption.
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