2011 (8) TMI 804 - AT - Customs

Project Import Regulations - Provisional assessment - reconciliation statement within three months from the completion of the import for finalization of the assessment - Held That - When reconciliation statements were filed however Commissioner (Appeals) has not gone into the reconciliation statement. Therefore, we find that the impugned order is not sustainable, hence set aside and the matter is remanded to the Commissioner (Appeals) to decide afresh.

Summary

Issues: Failure to file reconciliation statement, Eligibility for project import, Violation of principles of natural justice

In this case, the respondents were registered under the Project Import Regulations 1986 and imported goods provisionally under tariff heading 98.01 of the Customs Tariff Act. The respondents failed to file a reconciliation statement as required by a public notice, leading to the adjudicating authority determining the goods as ineligible for project import. However, the Commissioner (Appeals) allowed the appeal, stating that the project import was completed before the relevant regulation became operational and considering the financial difficulties faced by the respondents. The Revenue contended that the appeal decision was unsustainable due to the lack of reconciliation statement, citing a Supreme Court decision. The Tribunal noted that the reconciliation statement was indeed filed before the Commissioner (Appeals) but was not considered. Referring to the Supreme Court decision, the Tribunal emphasized that exemption benefits depend on compliance with conditions, even if they are directory. The Tribunal found the impugned order unsustainable, set it aside, and remanded the matter to the Commissioner (Appeals) for a fresh decision after considering the reconciliation statement and providing a reasonable opportunity for the respondent to be heard.

The Tribunal highlighted the importance of the reconciliation statement in obtaining the benefit of Project Import as per the public notice issued by the Customs House. The failure of the Commissioner (Appeals) to consider the reconciliation statement led to the unsustainability of the decision. By setting aside the impugned order and remanding the case, the Tribunal ensured that the matter would be re-evaluated, taking into account all relevant documents and providing the respondent with a fair chance to present their case. The decision reaffirmed the principle that compliance with regulatory conditions is crucial for availing of exemption benefits, emphasizing the significance of procedural fairness and adherence to legal requirements in customs matters.