2017 (10) TMI 150 - AT - Customs

Project import - import of Microprocessor based ticketing machine including Access Control Systems and Validator - denial of concessional rate of duty on the ground that the appellant did not produce installation certificate even after reminder letters - Held that - The Tribunal in the case of Creative Industries P. Ltd. Vs CC & CEX, Hyderabad 2008 (6) TMI 23 - CESTAT Bangalore had held that non-production of installation certificate for the purpose of Regulation (7) of the Project Import Regulations, 1986 is only procedural requirement and not a condition determining the eligibility of the impugned goods for the benefit of concessional rate of assessment - the non-submission of the installation certificates, especially considering that appellant has submitted other proof to establish the installation, cannot then sustain the demand of merit rate of duty in respect of the goods imported vide Bill of Entry No.5219 dt. 25.01.1989 namely computerized PCB in-circuit tester - decided in favor of appellant. Import of Validator - appellants have contended that the goods were never cleared by them - Held that - From the facts of the case, it emerges that appellants had not mentioned or produced evidence for abandoning the goods during the time that they were in bond. We therefore hold that the Commissioner (Appeals) cannot be faulted in his conclusion that plea of the appellant for abatement of the duty on the warehoused goods they were not cleared cannot be entertained notwithstanding such warehoused goods were disposed of by the department - decided against appellant. Liability of Interest - Held that - as the goods were imported in 1989 and the legal statutory provisional for enabling charging of interest was introduced only w.e.f 26.5.1995 by the Finance Act, 1995, hence there is merit in the appellant s contention that no interest can be demanded in respect of the imports which was done in 1989 - decided in favor of appellant. Decided partly in favor of appellant.

Summary

Issues:
1. Demand of differential duty for non-production of installation certificate
2. Import of validator and duty liability
3. Interest liability on imported goods

Issue 1: Demand of differential duty for non-production of installation certificate

The case involved Soumag Electronics Ltd., which imported goods under Project Import Regulations. The appellant failed to produce an installation certificate, leading to a demand for duty at merit rate. The appellant argued that the requirement for the certificate arose after their imports in 1989. The Tribunal considered evidence like fixed asset registers and invoices to prove installation. Previous tribunal decisions supported that non-production of the certificate was a procedural requirement, not affecting eligibility for concessional rate. Citing relevant case laws, the Tribunal ruled in favor of the appellant, stating that substantial relief should not be denied for procedural lapses. The appeal succeeded on this aspect.

Issue 2: Import of validator and duty liability

Regarding the import of a validator, the appellant claimed they never cleared the goods and that they were auctioned by the department. However, the appellant did not provide evidence of abandoning the goods while in bond. The Commissioner's decision to hold the appellant liable for duty and interest on the warehoused goods was upheld. The Tribunal found no fault with the Commissioner's conclusion, dismissing the appellant's plea for abatement of duty on the warehoused goods. The appeal on this issue was dismissed.

Issue 3: Interest liability on imported goods

The appellant contested the demand for interest on imported goods, arguing that interest provisions were introduced in 1995, while their imports were in 1989. The Tribunal agreed with the appellant, stating that interest liability could not arise for goods imported before the statutory provision for charging interest was in place. Consequently, the appeal on interest liability succeeded.

In conclusion, the Tribunal partially allowed the appeal, ruling in favor of the appellant on the issues of demand for differential duty and interest liability. However, the duty liability on the imported validator was upheld. The Tribunal disposed of the additional grounds raised by the appellant, bringing the case to a close with a mixed outcome for both parties.