2016 (12) TMI 825 - AT - Customs

Project import - The machineries imported were put to use for the intended purposes in the factory at Noida from 1989-90 till 11.05.1996 and the same were shifted to their factory at Silvassa, on closure of their Noida factory - whether the appellants are eligible for the benefit to reduced customs duty under PIR, 1986, for the machines and equipment imported under the nine Bills of Entry, during the period 1989-90? - Held that - Regulation 7 of PIR inserted w.e.f. 07.01.1992 would have prospective effect and cannot be made applicable for the imports made during the period prior thereto. The Tribunal in the case of Kores India Ltd. vs. Commissioner of Customs, Mumbai, 2016 (4) TMI 9 - CESTAT MUMBAI , has held that when the regulation was not in the statute when the goods were imported, such new regulation cannot be pressed in the service for denying the benefit of PIR - in the instant case, imports were made in December, 1989 and January, 1990 and SCN dated 31.10.97 was forwarded to the Appellants by Deputy Commissioner of Customs, vide his letter dated 14.09.2005. Further, we also find that the Appellants have submitted reconciliation statement along with supporting documents for each of the nine Bills of Entry before the Commissioner (Appeals). The Affidavit of the Manager of the Appellants also testifies that the imported machineries were installed in their factory at Noida and were used for the manufacture of computers till the factory was shifted to Silvassa in May, 1996. Other records also duly submitted by appellants - With the above evidence on record substantiating the installation and use of the machines imported under PIR, we are satisfied that the Appellants are eligible for benefits of project import and are not inclined to accept the plea of the Dept. to remand the matter pertaining to the period 1989-90 at this stage. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of imported machines and equipment under project import regulations, denial of project import benefits, submission of necessary documents for project import eligibility, retrospective application of new regulations, installation and use of imported machinery, reconciliation statement requirement, benefit denial under project import regulations.

Analysis:
The appeal challenged the order-in-appeal denying classification of machines and equipment imported for setting up a factory under project import regulations. The appellants imported machinery under Project Import Regulations, 1986, for manufacturing computer systems at their Noida factory. The dispute arose when the Commissioner (Appeals) upheld the order-in-original denying project import classification and ordering assessment on merits. The appellants argued that the imported machinery was used for manufacturing computers and peripherals in their Noida factory, supported by documents and affidavits.

The main issue was whether the appellants were eligible for reduced customs duty under Project Import Regulations, 1986, for the machinery imported during 1989-90. The Tribunal analyzed the requirement of submission of documents under Regulation 7, inserted in PIR in 1992, and held that it could not be retrospectively applied to imports made before that date. Citing precedents, the Tribunal emphasized that belated denial of project import benefits without evidence of non-installation was impermissible. The appellants submitted reconciliation statements, affidavits, survey reports, and certificates proving installation and use of the imported machinery, satisfying the Tribunal of their eligibility for project import benefits.

The Tribunal found that the appellants had provided substantial evidence, including reconciliation statements, affidavits, survey reports, and certificates, demonstrating the installation and utilization of the imported machinery for manufacturing computers. The Tribunal rejected the Department's plea for remand, concluding that the appellants were entitled to project import benefits for the period in question. Consequently, the appeal was allowed, granting relief to the appellants in accordance with the law.

In conclusion, the Tribunal ruled in favor of the appellants, holding that they were eligible for project import benefits for the machinery imported during 1989-90. The retrospective application of Regulation 7 was deemed inappropriate, and the appellants' submission of detailed evidence establishing the installation and use of the imported machinery was crucial in securing a favorable outcome. The decision emphasized the importance of providing necessary documentation to support claims for project import eligibility and highlighted the significance of evidence in such cases.