2005 (8) TMI 566 - AT - Customs

Summary

Issues: Duty determination on merit rate on denial project import due to lack of vital documents.

In this case, the applicant registered a contract with the Contract Cell, New Customs House, Mumbai, and cleared certain machinery. The issue arose when the importers failed to submit "Vital Document" to finalize the assessment under Project Import, leading to duty on merit rate being charged on the imported machines. The appeal was made regarding the duty determination on merit rate due to the denial of project import. The Department contended that the failure of importers to produce the "vital documents" resulted in the demand being quantified and determined. The vital documents were crucial for assessing what was imported and determining the assessable value. The applicant argued that they had provided proof of installation, a certificate from a Chartered Engineer, and other necessary documents for the imported items, and no duty demand should have been determined. The lower authorities supported by the DR argued that essential documents like bank remittance certificate and original triplicate of the bill of entry were not tendered, making the goods ineligible for Project Import benefits. The duty demands were challenged as being doubtful due to the absence of "Vital Documents."

The Tribunal found that the demand was made due to the lack of vital documents necessary to determine the duty. It was noted that the importer was an actual user under Project Import Regulations, and duty calculation was essential upon finalization of the Project Import, requiring determination of value and tariff classification. The Tribunal observed that the denial of project import concession seemed unwarranted as all vital documents for assessment were available, and the duty demands appeared to be based on assumptions in the absence of these documents. Consequently, the duty demands were considered doubtful, and the requirement for deposits was waived, with recovery stayed under Section 129E of the Customs Act. As a result, full waiver of pre-deposit was granted, and recovery was stayed, leading to the disposal of the application in favor of the appellant.