1996 (9) TMI 403 - AT - Customs

Summary

Issues:
- Denial of benefit of Project Imports under Heading 84.66 of CTA, 1975.
- Interpretation of the provisions of Project Import (Registration of Contract) Regulations, 1965.
- Determination of eligibility for concession based on the purpose of using the machine versus the location of the Plant or Project.
- Alleged violation of conditions of the contract for Project Import registration.
- Application of legal precedent regarding the transfer of imported machinery meant for expansion of an existing unit to a different location.

Analysis:
The appeal was filed against the order-in-appeal by the Collector of Customs (Appeals), Bombay, upholding the denial of the benefit of Project Imports under Heading 84.66 of CTA, 1975 to the appellants. The appellants contended that the location of the Plant or Project should not determine eligibility for concession, emphasizing that the purpose of using the machine is crucial. They argued that their photo finishing machinery would serve its purpose better in Bombay rather than Goa. However, the Revenue argued that the contract was registered based on the location in Goa for substantial expansion of their unit, and since the machinery was diverted to Bombay, the benefits were rightly denied.

The Tribunal examined the records and noted that the application for registration indicated Goa as the location of the Plant and Machinery, while the machinery was diverted to Bombay. The Tribunal highlighted that the conditions of the contract, as required for concession under Project Import, cannot be deviated from. Referring to legal precedent, specifically the case of Jacsons Thevara v. Collector of Customs & Central Excise, the Tribunal emphasized that if machinery imported for the expansion of an existing unit is transferred to another location, the benefit of project imports is not available. The Tribunal concluded that since the machinery was not used for substantial expansion at the registered location, the appellants were not eligible for the concession under Heading 84.66.

In light of the above analysis and legal principles, the Tribunal upheld the impugned order denying the benefit of Project Imports under Heading 84.66 of CTA, 1975 to the appellants. The appeal was rejected based on the violation of the conditions of the contract for Project Import registration and the transfer of the machinery to a location different from the registered project site.