2013 (3) TMI 285 - AT - Customs

Project Import - Classification of Goods - Actual User Condition- Recovery of concessional Duty - Importer had submitted the final reconciliation statement after lapse of Time - Appellant imported units of Heat Recovery Steam Generator (HRSG) and accessories, the assessee furnished certificate of the Chartered Engineer certifying installation of the impugned goods imported under Project Import Regulations (PIR) for claiming exemption in duty but after lapse of time - Held that - Regulation 7 prescribed a condition which did not govern the eligibility of the goods imported under PIR for concessional assessment. Thus in accordance with Regulation 7 Finalisation of contract - The importer shall within three months from the date of clearance or within such extended period, submit a statement indicating the details of the goods imported. Thus Once the imported equipment was installed the benefit could not be denied for the failure to fulfil the conditions prescribed under Regulation 7 of PIR as decided by so many cases of Tribunal like Polyplex Corporation Limited v. C.C.E (2007 (2) TMI 14 - CESTAT,NEW DELHI) and many more.

Summary

Issues:
1. Denial of project import benefit for failure to submit reconciliation statement within the specified time frame under Project Import Regulations, 1986.
2. Interpretation of Regulation 7 of Project Import Regulations, 1986.
3. Applicability of procedural conditions in determining eligibility for concessional rate of duty.
4. Discretion of proper officer to condone delay in submission of documents under Regulation 7.
5. Comparison with precedent judgments regarding denial of project import benefit.
6. Relevance of fulfilling conditions under Project Import Regulations for concessional assessment.
7. Consideration of the purpose of procedural conditions in project imports.
8. Impact of installation of imported goods on eligibility for concessional rate of duty.

Analysis:
The judgment by the Appellate Tribunal CESTAT Bangalore involved an appeal by M/s. Alstom Projects India Ltd. against the denial of project import benefit due to failure to submit a reconciliation statement within the specified time frame under Project Import Regulations, 1986. The impugned order upheld the demand of differential duty based on the non-fulfillment of procedural conditions. The appellant argued that substantial benefit could not be denied for procedural violations, citing relevant Supreme Court precedents. The Tribunal examined Regulation 7 of PIR, emphasizing that the purpose of the statute was to grant a beneficial rate of duty for setting up new projects, and procedural requirements should not override eligibility conditions.

The Tribunal referenced previous decisions like Polyplex Corporation Limited v. C.C.E. and Creative Industries Private Limited v. C.C.E., highlighting that Regulation 7 was a procedural requirement and not a condition determining eligibility for concessional assessment. The Tribunal noted that the benefit could not be denied solely for failing to meet Regulation 7 requirements if the imported equipment was installed. The judgment emphasized the discretion of the proper officer to condone delays in document submission and regularize benefit availment.

In contrast, the Respondent relied on the judgment in Mihir Textiles Ltd. v. Collector of Customs, Bombay, where the denial of assessment was upheld for failure to satisfy specific conditions. However, the Tribunal found that in the case of M/s. Alstom Projects India Ltd., the imported goods were installed as required, and the demand for differential duty was not valid. The judgment concluded by vacating the impugned order and allowing the appeal, emphasizing the importance of considering the purpose of procedural conditions in project imports and the impact of goods installation on eligibility for concessional rates of duty.