2023 (11) TMI 914 - AT - Customs

Project Import - finalization of provisional assessment under section 18(2) of the Customs Act read with Regulation 17 of the Project Import Regulations, 1986 - non-compliance of the post import conditions of the Project Import Regulations - confiscation - HELD THAT - Pursuant to repeated requests from the appellant for reconciliation and for reconsideration and finalization of the project import, the department however issued Show Cause Notice dated 20.10.2014, despite rendering copies of file notes of the communication regarding essentiality certificates, contract and other import related documents required to be furnished for finalizing the Project Import assessment undertaken. The importer s repeated requests for the release of the Security Deposit therefore failed to fructify. The department, with reference to the re-conciliation statement pointed out the anomalous position with regard to the project registered for Dus Nallah not being located at the given site and charged with diversion of import goods. In the first place issuance of Show Cause Notice in itself is grossly misplaced and misdirected. Moreover, this has been compounded by the Ld. Adjudicating Authority by adjudicating the matter against the appellants. Despite clearly taking note of the factual position, disallowing the benefit of the project import regulations and the concessional rate of duty is certainly an error of judgement - it is also noted that the appellant has repeatedly written to the department with regard to the refund of the Security Deposit, post completion of the project and submission of the required documents. As is evident from the exchange of correspondence between the department and the importer, in respect of return of Security Deposit, it is noted that the department initially for several years took the plea of first having lost the file and thereafter has grossly delayed the matter by over 6-7 years. The impugned order is set aside. The department is directed to undertake and complete the reconciliation process within two months of the receipt of this order - Appeal allowed.

Summary

Issues involved: Appeal against Order-in-Original denying project imports benefits under Customs Act, levy of duty, confiscation of goods, redemption option, relocation of project site, show cause notice for diversion of import goods, refund of Security Deposit.

Summary:
1. The appellants appealed against the Order-in-Original denying project imports benefits and imposing duty under Customs Act. The projects were relocated due to unforeseen circumstances, with necessary approvals from the government. The appellant had no role in the decision-making process.

2. The appellant imported goods for two projects, which were relocated to a new site due to flash floods. Correspondence and approvals from government officials confirmed the relocation of the project. The appellant had no responsibility in the decision-making process.

3. The department issued a Show Cause Notice despite repeated requests for reconciliation and finalization of the project import. The notice alleged diversion of import goods to an unapproved site, which was disputed by the appellant. The issuance of the notice was deemed misplaced and the denial of project import benefits was considered an error of judgment.

4. The appellant sought refund of the Security Deposit post-completion of the project, submitting all required documents to the department. The department delayed the refund process for several years, claiming file loss initially. The delay in refunding the legitimate amount due to the appellant was noted.

5. The Tribunal set aside the impugned order, directing the department to complete the reconciliation process within two months. The relocation of imported goods to a new site would not affect the grant of project import benefits if admissible. The department was instructed to release the Security Deposit due to the appellants post-reconciliation process.

Conclusion: The appeal was allowed, and the impugned order was set aside, emphasizing the importance of completing the reconciliation process and refunding the Security Deposit promptly.