1993 (11) TMI 124 - AT - Customs

Summary

Issues Involved:
1. Eligibility of the imported Fuji Colour Roll Printer for concessional assessment under Tariff Heading 84.66 of the Customs Tariff Act, 1975.
2. Requirement of registration under the Factories Act for claiming the benefit of project import.
3. Interpretation of the term "substantial expansion" in the context of project imports.

Detailed Analysis:

1. Eligibility of the Imported Fuji Colour Roll Printer for Concessional Assessment under Tariff Heading 84.66 of the Customs Tariff Act, 1975:
The primary issue was whether the Fuji Colour Roll Printer Model 8C 6910, imported by the respondent, should be assessed under Heading 84.66 of the Customs Tariff Act, 1975. The original authority rejected the assessment, arguing that the printer alone could not substantially expand the laboratory's production. The appellate authority, however, accepted the importers' contention, noting that the printer was imported to enhance the laboratory's production and fulfilled the conditions of project import under Heading 84.66.

The revenue contended that only a complete Mini Laboratory system, comprising processing, developing, and printing systems, is eligible for concessional assessment under Heading 84.66. They argued that the printer alone could not add to the output unless a complete unit was imported.

2. Requirement of Registration under the Factories Act for Claiming the Benefit of Project Import:
The revenue argued that the importer was not registered under the Factories Act and was merely in the service industry, which should disqualify them from the benefit of the notification. The appellate authority did not address this requirement. The importer countered that Heading 84.66 did not specify the need for registration under the Factories Act and that their registration with DGTD and ACCI was sufficient for the benefit.

3. Interpretation of the Term "Substantial Expansion" in the Context of Project Imports:
The appellate authority held that the imported printer, along with locally purchased developing and processing equipment, fulfilled the conditions for substantial expansion under Heading 84.66. The revenue, however, maintained that the printer alone could not substantially expand the laboratory's production capacity.

Separate Judgments Delivered:

Majority Opinion:
The majority opinion, represented by Member (J) and Member (T), concluded that while the appellate authority's findings were supported by the ruling in Asiatic Oxygen Ltd., other conditions of the project import, such as registration under the Factories Act, needed to be fulfilled. The matter required reconsideration, and thus, the case was remanded to the original authority for de novo adjudication.

Minority Opinion:
Member (T) disagreed with the need for remand, arguing that the conditions of Heading 84.66 did not include registration under the Factories Act. He cited the Supreme Court's definition of "industrial undertaking" and various Tribunal decisions supporting the eligibility of service industries for project import benefits. He proposed rejecting the revenue's appeal.

Final Order:
In view of the majority opinion, the matter was remanded to the original authority for reconsideration, focusing on whether the importer fulfilled the conditions laid down by the Government and upheld by the Madras High Court in the case of Dass Labs. The original authority was directed to dispose of the matter after giving due opportunity for hearing and considering any evidence presented by the importer.