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1991 (4) TMI 136 - HC - Customs

Issues:
The judgment involves the question of whether the petitioner can avail of the concessional rate of duty under Heading 84.66 of Section XVI of the Customs Tariff Act, 1975.

Details of the Judgment:

Issue 1: Import of Empty Gas Cylinders
The petitioner started new units for manufacturing gases but faced constraints in importing gas cylinders required for achieving full licensed capacity. The petitioner applied for import approval, and the Ministry forwarded the papers to the Chief Controller of Imports and Exports. The petitioner sought endorsement for project import under the Indian Customs Tariff, which was later replaced by Heading 84.66 of the Customs Tariff Act, 1975.

Issue 2: Registration of Contract
The petitioner entered into a contract with a Japanese firm for the supply of gas cylinders and applied for registration under the Project Imports Regulations. However, the respondent refused to register the contract, leading to the petitioner's challenge through an application in 1979.

Issue 3: Interpretation of 'Initial Setting Up'
The Customs Authorities contended that 'initial setting up' should refer to the first commissioning, while the petitioner argued for a broader interpretation to include phased implementation. The judgment rejected the Customs Authorities' narrow interpretation, emphasizing that 'setting up' means completion and includes phased implementation for the first time.

Issue 4: Construction of Regulations
The judgment highlighted that the phrase 'initial setting up' should be construed liberally to promote industrialization, in line with the Supreme Court's stance on concessional rates for encouraging industrial activity. It also emphasized the mandatory nature of registering contracts under the Project Imports Regulations to ensure the benefits of Heading 84.66 are not undermined.

In conclusion, the judgment set aside the respondent's decision, ruling in favor of the petitioner's entitlement to the concessional rate under Heading 84.66 of the Customs Tariff Act, 1975.

 

 

 

 

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