1989 (3) TMI 385 - HC - Customs

Summary

Issues Involved:
1. Promissory Estoppel
2. Eligibility for Concessional Duty under Heading No. 84.66
3. Definition of "Industrial Plant"
4. Authority of Customs Department

Detailed Analysis:

Promissory Estoppel:
The first issue addressed was whether the Customs Department is bound by promissory estoppel to allow concessional duty under Heading No. 84.66 and register the contract accordingly. The petitioner argued that representations made by the Department of Industry and the Joint Chief Controller of Imports and Exports, which endorsed the import license for concessional duty, should bind the Customs Department. The court noted that the Handbook of Import and Export Procedures allows the Customs Officer discretion to grant concessional duty based on the recommendation of the Sponsoring Authority. The court concluded that no clear and unequivocal promise was made by any governmental authority that the machinery would be eligible for concessional duty. Therefore, the Customs Department was not bound by promissory estoppel.

Eligibility for Concessional Duty under Heading No. 84.66:
The second issue was whether the machinery imported by the petitioner was eligible for concessional duty under Heading No. 84.66 of the Customs Tariff Act. The Customs Department contended that the machinery did not qualify as it was for the expansion of a film laboratory, which they argued was not an industrial plant. The court emphasized that the term "industrial plant" is not defined in the Customs Tariff Act and relied on dictionary meanings, which generally associate "plant" with industrial or mechanical business. The court found that the film processing laboratory could be considered an industrial plant as it involves mechanical processing, transforming the film into a new product. However, the court also noted that Heading No. 84.66 requires the industrial plant to be specified by the Central Government, and there was no evidence that the film processing laboratory was specified as such.

Definition of "Industrial Plant":
The court examined whether the film processing laboratory qualifies as an "industrial plant." The dictionary definitions of "plant" and "industry" were considered, and it was determined that an industrial plant involves mechanical or industrial business. The court found that the film processing laboratory fits this definition as it involves mechanical processing of films, transforming them into a new product. However, the court noted that the concessional duty under Heading No. 84.66 applies only to specified industrial plants, and there was no indication that the film processing laboratory was specified by the Central Government.

Authority of Customs Department:
The final issue was whether the Customs Department had the authority to refuse registration of the contract under Heading No. 84.66. The court held that the Customs Department has the exclusive jurisdiction to determine the eligibility for concessional duty and to register contracts accordingly. The court emphasized that the Customs Officer must exercise discretion fairly and independently, even if the Sponsoring Authority recommends concessional duty. The court concluded that the Customs Department acted within its jurisdiction and did not commit any illegality in refusing to register the contract.

Conclusion:
The writ petition was dismissed, and the court upheld the Customs Department's decision to refuse registration of the contract under Heading No. 84.66. The court found no binding promise or representation that would invoke promissory estoppel, and it concluded that the film processing laboratory was not specified as an industrial plant eligible for concessional duty under Heading No. 84.66. The Customs Department was within its rights to independently assess and refuse the registration.