2004 (11) TMI 263 - AT - Customs

Summary

Issues: Denial of concessional rate of duty under Project Import for imported goods due to capacity expansion interpretation.

In this case, the issue revolved around the denial of a concessional rate of duty for goods imported under Project Import by the appellant. The appellant, engaged in wire manufacturing, had expanded its capacity to produce High Tensile Stranded Low Relaxation Wires. However, Customs authorities deregistered the Project Import Contract, leading to a demand for differential duty. The Deputy Commissioner and Commissioner (Appeals) based their decisions on the overall production capacity, which the appellant contested. The appellant argued that the expansion should only be considered for the High Tensile Stranded Low Relaxation Wire Unit, not the overall capacity. The Tribunal agreed with the appellant's interpretation, emphasizing that the expansion should be specific to the unit producing the particular item. While the appellant's case was allowed on the question of legal provision interpretation, the Tribunal remanded the case to the original authority for verification of whether the imported goods were indeed for expanding the capacity of producing the specific wires. The appeal was allowed by way of remand, highlighting the importance of accurate verification in such cases to determine eligibility for concessional rates under Project Import regulations.