2018 (7) TMI 1605 - AT - Customs

Project Import - import of goods classifiable under heading 98101 of Customs Tariff Act, 1975 - benefit of project import denied - registration of contract for availing benefit of project import - whether the Commissioner (Appeal), in the impugned order, as correctly followed the provisions of PIR-86 while rejecting the appeal filed by the appellant? Held that - From the combined reading of Rule 4 and 5 it is the evident that the registration of the contract for availing the benefit of Project Import has to be done on or before their importation so, the Commissioner (Appeals) finding that the registration should be done prior to import is not correct - In this case, the appellant has not effected the clearance of goods till their project at the strength of Sponsoring Authority Certificate was permitted by the Customs - no violation of project import benefit has been committed by the appellant. Also the appellant was registered for benefit under project import benefit initially, after the lapse of seven and a half years. The Department can t take the stand contrary to that at the time of finalization denying the concessional rate of duty under project import. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of project import benefit under heading 98101 of Customs Tariff Act, 1975.
2. Interpretation of project import regulations, specifically PIR-86.
3. Compliance with post-importation conditions under Section 28 of Customs Act, 1962.
4. Late issuance of Show Cause Notice and time bar applicability.
5. Registration of contract for availing project import benefit.

Analysis:

1. The appeal was filed against the denial of project import benefit under heading 98101 of Customs Tariff Act, 1975. The lower Adjudicating Authority had rejected the benefit due to non-registration of the contract required for project import regulation before the import of capital goods. The Commissioner (Appeal) upheld this decision.

2. The appellant argued that they had applied for registration of the contract after importing the goods and before filing the Bill of Entry for Home Consumption. They contended that the Commissioner (Appeal) misinterpreted the regulations by requiring the application to be filed before importation. The appellant asserted that they had complied with the regulations and were entitled to the project import benefit.

3. Regarding compliance with post-importation conditions, the appellant claimed that they fulfilled the requirements in December 2002, invoking the limitation under Section 28 of the Customs Act, 1962. They argued that the extended period of limitation should not apply due to the Department's delay in finalizing the assessment without valid reasons.

4. The issue of the late issuance of the Show Cause Notice and the time bar applicability was raised. The appellant highlighted that the demand was raised after seven and a half years, questioning the validity of the demand under Section 28(1)(b) of the Customs Act, 1962. The Tribunal noted the appellant's defense on the time bar issue but found that the assessment was done provisionally under Section 18 of the Customs Act, 1962.

5. The key issue revolved around the registration of the contract for availing the project import benefit. The Tribunal analyzed the relevant regulations and found that the registration should be done on or before importation. As the appellant had not cleared the goods until the project was permitted by Customs, no violation of project import benefit was found. The Tribunal set aside the impugned order and allowed the appeal, emphasizing the correct interpretation of the regulations.

This comprehensive analysis of the judgment provides insights into the issues involved, the arguments presented by the parties, and the Tribunal's findings on each issue, ensuring a detailed understanding of the legal aspects and implications of the case.