1997 (3) TMI 306 - AT - Customs

Summary

Issues:
Capacity of imported plant for manufacturing fried Banana Chips; Denial of registration by Asstt. Collector based on machine capacity calculation exceeding DGTD permit; Interpretation of "installed or designed capacity of a plant" under Rule 5(3)(c); Appellants' argument for two-shift operation due to female labor and cleaning requirements; Comparison with case law on project importation; Decision on registration request under Project Imports.

Analysis:
The case involved a dispute over the capacity of an imported plant for manufacturing fried Banana Chips, leading to the denial of registration by the Asstt. Collector based on a calculation that exceeded the permit granted by the DGTD. The appellants contended that the plant could only operate in two shifts due to female labor employment and daily cleaning requirements to prevent product rancidity. They emphasized that all descriptions of the plant's capacity were based on two shifts, including the DGTD certificate issued on that basis. The Revenue argued that the plant's installed or designed capacity exceeding the DGTD certification justified the denial of registration under Rule 5(3)(c).

Upon examination, the Tribunal noted the appellants' consistent emphasis on the plant's two-shift operation before importation and the phased manufacturing program indicating gradual production increase over years. They found that the DGTD had accepted the plant's capacity at 600 tonnes on a two-shift basis, aligning with the appellants' assertions. Referring to a precedent involving project importation, the Tribunal observed that the case's variation was minimal compared to the cited case, where the import was necessitated by design considerations rather than unauthorized intent. Considering the circumstances holistically, the Tribunal concluded that the plant's capacity should be deemed on a two-shift basis, warranting the registration of the contract under Project Imports.

In the final decision, the Tribunal allowed the appeal, setting aside the lower orders and directing the registration of the contract along with attendant benefits for the importers. The judgment clarified the interpretation of "installed or designed capacity of a plant" under Rule 5(3)(c) in the context of project importation, emphasizing the acceptance of the plant's capacity on a two-shift basis and rejecting the denial based on capacity calculation exceeding the DGTD permit.