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Issues: Classification of imported automatic camera under Heading 84.66 Customs Tariff Act, 1975 for concessional assessment as project import.
The judgment involves an appeal filed by the Collector of Customs, Madras against an order challenging the classification of an automatic camera with accessories imported by the respondents under Heading 84.66 Customs Tariff Act, 1975 for concessional assessment as project import. The respondents imported the camera against capital goods allowed under Open General Licence (OGL) of Import and Export Policy. They applied for registration of their purchase order under the Project Imports Regulation for classification under Heading 84.66 CTA. The respondents, engaged in the printing industry, imported the camera to eliminate delays and reduce costs associated with outsourcing certain services. The Assistant Collector initially rejected the application, stating that a single camera import did not constitute initial setting up of machinery since production had already started in 1984. The Collector (Appeals), however, overturned this decision, considering the camera essential for the offset printing press and part of the initial setup. The Collector (Appeals) emphasized that neither the tariff heading nor the Project Import Regulation specified a condition against the import of a single camera. The respondents' appeal was allowed, directing concessional assessment as Project Import for the imported goods. The appellant Collector argued that the imported camera did not contribute to substantial expansion but only increased efficiency and cost-effectiveness of existing printing machinery. The appellant relied on a Tribunal decision in another case to support the contention that a camera import without reference to a project or proper contract did not qualify for Project Imports concession. The respondents, represented by their Marketing Executive, emphasized that the camera was an integral part of the plant and equipment necessary for initial setup, even though the offset press was imported first. They stated that the camera was included in the list of equipment for the project report and finance arrangements, completing their offset printing plant. The Tribunal considered the arguments presented by both parties. While the Collector (Appeals) found the inclusion of the camera in the application for financial assistance and the order placement timeline favorable for the respondents, the Tribunal referred to previous decisions emphasizing the necessity of a formal contract for claiming concessional assessment under Heading 84.66 CTA. The Tribunal cited cases where a formal contract was deemed essential for availing concessions under similar headings. Since the respondents sought registration based only on a purchase order, which was deemed insufficient to fulfill the contractual condition, the rejection of their registration application by the Assistant Collector was upheld. Consequently, the impugned order of the Collector (Appeals) was set aside, and the Department's appeal was allowed.
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