1997 (8) TMI 196 - AT - Customs

Summary

Issues Involved:
1. Entitlement to the benefit of Notification No. 116/79-Cus.
2. Entitlement to the benefit of concessional rate under Customs Heading 84.66.
3. Registration of contract under Project Import Regulations.
4. Definition and interpretation of "clearance for home consumption".

Detailed Analysis:

Entitlement to the Benefit of Notification No. 116/79-Cus.:
The appellants claimed the benefit of Notification No. 116/79-Cus., which allows the import of non-consumable goods for exhibition without an import license, provided they are re-exported within six months. The notification exempts such goods from customs duty if a bond is executed to re-export the goods. The appellants argued that the goods were imported for exhibition and thus should be considered under this notification.

Entitlement to the Benefit of Concessional Rate under Customs Heading 84.66:
The appellants sought a concessional rate of duty under Customs Heading 84.66, which applies to project imports. They contended that the registration of the contract for project imports is independent of the clearance of goods for home consumption and that they should be eligible for the concessional rate despite the goods being initially imported for exhibition.

Registration of Contract under Project Import Regulations:
The appellants applied for registration of their contract under the Project Imports (Registration of Contract) Regulations, 1965. The Assistant Collector rejected this application on the grounds that the goods had already been cleared for home consumption and thus did not qualify for the concessional rate under Heading 84.66. The appellants argued that the registration of the contract should be treated as an independent act and should not be influenced by the initial purpose of import.

Definition and Interpretation of "Clearance for Home Consumption":
A key issue was whether the clearance of goods for exhibition under a "Fair Bill of Entry" constitutes "clearance for home consumption." The appellants argued that there is no definition of "clearance for home consumption" under the Customs Act and that the goods should be considered as warehoused until they are cleared for home consumption. The opposing view was that the goods, once cleared under a Bill of Entry, are considered cleared for home consumption if not specifically warehoused.

Judgments:

Member (Judicial):
The Member (Judicial) held that the goods were imported under Para 292 of the Import & Export Policy and Notification No. 116/79-Cus., and thus were meant for re-export. The registration of the contract for project imports is an independent act, and the appellants had validly obtained an import license. Therefore, the Assistant Collector should have granted the benefit of the notification and registered the contract for project imports. The appeal was allowed, and the impugned order was set aside.

Member (Technical):
The Member (Technical) disagreed, stating that the goods were cleared for home consumption under a "Fair Bill of Entry," which is not recognized under the Customs Act. The Bill of Entry filed was for home consumption, and thus the goods did not qualify for the concessional rate under Heading 84.66. The application for registration of the contract was made after the goods were cleared, which disqualified them from the benefits of project imports. The appeal was rejected.

Third Member (Judicial):
The Third Member agreed with the Member (Technical), holding that the Bill of Entry filed was for home consumption and not for warehousing. The appellants were not eligible for the benefit of project import since the registration of the contract was applied for after the clearance of goods. The appeal was rejected.

Majority Order:
In terms of the majority order, the appellants are not entitled to the benefit of Notification No. 116/79-Cus. and the benefit of project import as claimed by them. Hence, the appeal is rejected.