TATA SPONGE IRON LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) Heard Mr. B.K. Mahanti, learned Senior Counsel appearing along with Mr. A. Mohanty, learned Counsel for the petitioner, as well as Mr. B. Dash, learned Central Government Counsel appearing for the opposite parties and perused the record.

(2.) The brief facts of the case are that petitioner-company, which has its plant in District Keonjhar, undertook expansion work to increase its capacity, for which it decided to get basic engineering drawings from a foreign company M/s. Lurgi Metalogical GMBH. For such purpose, the petitioner had entered into an agreement with M/s. Lurgi on 6.12.1995 and 1.3.1996. For importing designs from M/s. Lurgi, the petitioner was imposed Cess under the Research and Development Cess Act, 1986 and Rules framed thereunder. According to the learned Senior Counsel appearing from the petitioner, it was compelled to make the payment of Cess amounting to Rs. 14,91,537.20. The payment of Cess was made as the as designs were urgently required, but thereafter the petitioner made a claim for refund of the said Cess under Rule 8 of 1996 Rules. The said application for refund having been rejected by the Secretary, Technology Development Board, Department of Science and Technology, New Delhi vide order dated 22.08.2000, the present writ petition has been filed.

(3.) The submissions of the leaned counsel of the petitioner is that Cess can be charged only in case of import where there is a foreign collaboration and in the present case, the petitioner has only imported drawings, without there being foreign collaboration with M/s. Lurgi with regard to the same. It is submitted that though the definition of import and technology has been given in Section 2(d) and (h) of the Act, 1986, but foreign collaboration has not been defined and the meaning of the said term has to be construed as understood in common parlance. According to the petitioner, since there was no foreign collaboration with regard to import of designs, the Cess could not be levied on the petitioner. It is further submitted that Rule 3 of 1996 provides that import should be approved by the Central Government and the designs, which have been imported by the petitioner, have not been so approved and as such, the levy of Cess is illegal and ought to be refunded. In support of the submission, learned Senior Counsel has relied on a Division Bench decision of Calcutta High Court in the case of Indian Oxygen and another v. Union of India and Ors, 1996 CWN 761.