1987 (3) TMI 348 - AT - Customs

Summary

Issues:
Whether the appellants are entitled to the benefit of project importation in respect of the goods imported by them.

Detailed Analysis:

Issue 1: Entitlement to Project Importation Benefit
The Assistant Collector rejected the appellants' claim for project contract registration under Heading 84.66-CTA, stating that the imported equipment was not used in the production of articles in an industrial plant, and the appellants failed to satisfy the conditions stipulated in the regulations. The Appellate Collector upheld this decision, emphasizing that dubbing films, even if considered a manufacturing activity, did not qualify as a substantial industrial activity under the project importation criteria. The appellants argued that the documents they provided constituted a contract, including order placement, acceptance, and a Letter of Credit. They also referred to certificates from NFDC and customs notices supporting their position.

Issue 2: Contractual Requirements
The appellants contended that the documents they submitted constituted a contract, but the tribunal found this argument untenable. The tribunal highlighted that a formal contract is required as per Heading 84.66, and mere order placement, acceptance, and similar documents do not fulfill this requirement.

Issue 3: Compliance with Eligibility Conditions
The tribunal considered the eligibility conditions set by the Govt. of India for project importation, requiring recognition as an industry and registration under the Factories Act. Referring to a Madras High Court judgment, it was noted that the NFDC certificate did not equate to industry registration, and the appellants failed to show registration with the relevant authorities. Additionally, the appellants did not qualify as a factory under the Factories Act, as they intended to register post-importation.

Conclusion
The tribunal held that the appellants did not meet the conditions for project importation benefit, as they failed to satisfy the eligibility criteria of industry recognition and factory registration. Despite disagreeing with the lower authorities' reasons, the tribunal upheld the decision based on the legal position established by the High Court judgment. Consequently, the appeals were dismissed, denying the appellants the benefit of project importation.