1979 (11) TMI 257 - Commissioner - Customs

Issues Involved:
1. Eligibility for assessment under heading 84.66 of the Customs Tariff Act.
2. Requirement of contract registration before clearance for home consumption.
3. Interpretation of sub-regulations (2) and (4) of Regulation 3 of Notification No. 183-Cus., dated 18-11-1965.
4. Custom House practice regarding endorsement on the Import Trade Control (ITC) Licence.
5. Procedural delays and the role of various governmental agencies in obtaining necessary endorsements.

Issue-wise Detailed Analysis:

1. Eligibility for assessment under heading 84.66 of the Customs Tariff Act:
The appellant, M/s. Modern Nets Limited, requested that certain machinery capital assets imported for their factory be assessed under heading 84.66 of the Customs Tariff Act. The goods were initially assessed under 84.37(2). The benefit under heading 84.66 is permissible if the goods are imported against specific contracts registered with the appropriate Custom House before clearance for home consumption.

2. Requirement of contract registration before clearance for home consumption:
The Assistant Collector rejected the appellant's request for reassessment under 84.66 because the contracts were not registered with the Customs House before the clearance of the goods. The appellant argued that they were misinformed by the Customs House that registration could not be done without a specific endorsement from the ITC Licence Issuing Authority.

3. Interpretation of sub-regulations (2) and (4) of Regulation 3 of Notification No. 183-Cus., dated 18-11-1965:
Sub-regulation (2) requires the importer to apply for registration as soon as they obtain the ITC Licence. Sub-regulation (4) requires the application to be accompanied by the original contract deed, the ITC Licence, and a statement describing the articles licensed to be imported, duly attested by the issuing authority. The Custom House practice of requiring an endorsement on the ITC Licence that the goods are eligible for assessment under 84.66 was found to be unwarranted by the appellate authority. The attestation mentioned is only for the statement describing the articles licensed to be imported.

4. Custom House practice regarding endorsement on the ITC Licence:
The appellate authority held that the Custom House's practice of treating the endorsement by the ITC Authorities as a statutory condition for registration of contracts was incorrect. The Custom House should grant provisional registration to importers who possess an ITC Licence without the endorsement and make it contingent upon later scrutiny of the requisite Project Reports, Technical feasibility reports, and other relevant documents.

5. Procedural delays and the role of various governmental agencies in obtaining necessary endorsements:
The appellant faced delays and refusals from various governmental agencies, including the Textile Commissioner and the Ministry of Industry, in obtaining the necessary endorsement on the ITC Licence. The appellate authority noted that the refusal of the Textile Commissioner to grant the endorsement was unwarranted and that the appellants had taken every possible step to obtain it. The delays were attributed to the interconnected functioning of various governmental agencies, which was not the fault of the appellant.

Conclusion:
The appeal was allowed because the Custom House's interpretation of sub-regulations (2) and (4) of Regulation 3 was unwarranted. The appellant had done everything within their power to secure the benefit of Project Import Regulations. The contracts should be registered, and the benefit of Project Import Regulations should be extended to the appellant. The Custom House's practice of requiring an endorsement on the ITC Licence was deemed incorrect, and provisional registration should be granted based on the possession of an ITC Licence.

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