Madras HC Allows Customs Duty Exemption on STP Imports Despite CMDA Approval Granted Post-Import

The Madras High Court has allowed a customs duty exemption on the import of a Sewage Treatment Plant (STP), even though the mandatory approval from the Chennai Metropolitan Development Authority (CMDA) was obtained after the importation of the goods. The customs department had denied the exemption, arguing that the approval should have been in place before the import. However, the High Court took a pragmatic view, observing that the CMDA approval was a procedural requirement for the installation of the STP, not for its import. Since the approval was eventually granted and the STP was installed for its intended purpose, the court held that the substantive benefit of the duty exemption should not be denied on a procedural technicality. This ruling provides relief to importers by differentiating between procedural conditions for installation and mandatory conditions for the import itself, ensuring that tax benefits are not lost due to procedural delays.