1996 (10) TMI 271 - AT - Customs

Summary

Issues:
1. Claim for exemption under Notification No. 197/76 for testing equipment used with oil well cement.
2. Consideration of testing equipment as ancillary equipment or component part of cementation unit.
3. Requirement of registration of contract for Project Import claim.

Analysis:

The appeal involved a dispute regarding the exemption from customs duty under Notification No. 197/76 for testing equipment used with oil well cement. The appellants imported sophisticated equipment and spares for testing the quality of oil well cement, claiming exemption under the said notification. The Collector of Customs (Appeals) rejected the claim, leading to the appeal before the Tribunal.

The appellants argued that the testing equipment should be considered as either ancillary equipment or a component part of the cementation unit, making them eligible for the exemption under Notification No. 197/76. They contended that the equipment was essential for the preliminary stage of oil exploration and, therefore, should be covered by the notification. However, the Departmental Representative (D.R.) disagreed, stating that the testing equipment did not qualify as ancillary equipment or a component part of the cementation unit.

Upon hearing both sides, the Tribunal analyzed the provisions of Notification No. 197/76. The Tribunal observed that the notification only exempts specified articles and component parts thereof imported for use in connection with the exploration of mineral oil or gas. The Tribunal concluded that the testing equipment could not be considered as ancillary equipment for the cementation unit as per the notification's language. Additionally, the Tribunal found that the equipment intended for testing the quality of oil well cement could not be deemed a component part of the cementation unit.

Regarding the plea concerning Project Import regulations, the Tribunal noted that no evidence was presented to prove the registration of the contract, which was a prerequisite for claiming benefits under Project Import. The appellants failed to provide any evidence even during the appeal proceedings, leading to the rejection of this plea as well.

In light of the above analysis, the Tribunal upheld the Collector's decision and rejected the appeal, as the testing equipment did not qualify for the exemption under Notification No. 197/76. The failure to establish the equipment as ancillary or a component part, along with the absence of evidence for project import registration, led to the dismissal of the appellant's claims.