2000 (9) TMI 776 - AT - Customs

Summary

Issues Involved:
1. Short levy of customs duty.
2. Invocation of proviso to Section 28 for recovery beyond six months.
3. Registration and assessment under Project Import Regulations.
4. Applicability of concessional duty under Notification No. 132/85-Cus.
5. Misstatement and suppression of facts by the importer.

Issue-wise Detailed Analysis:

1. Short levy of customs duty:

The Collector of Customs, Bombay, issued a Show Cause Notice (SCN) alleging a short levy of Rs. 24,29,647 due to the goods being assessed under a concessional rate of duty under Project Imports instead of the correct rate. The Collector found that the items in question were imported and assessed before the contract was registered under Project Imports, thus no short levy occurred. The Assistant Collector's failure to notice discrepancies in the import licence and registration application was deemed administrative negligence, not misstatement or suppression by the importer.

2. Invocation of proviso to Section 28 for recovery beyond six months:

Since the charge of short levy was not sustained, the question of invoking the extended period under the proviso to Section 28 did not arise. The Collector concluded that the discrepancy in the contract registration was due to administrative oversight and not due to any fault of the importer, thus negating the need for invoking the extended period for recovery.

3. Registration and assessment under Project Import Regulations:

The respondents had clearly indicated in their application for registration that they did not intend to avail the project import facility for certain items. The Collector noted that the contract was registered only after the Bill of Entry for the items was filed, and the items were imported before the registration. Hence, the concessional rate under Project Imports did not apply to these items. The Vice-President, however, argued that once a contract is registered under Project Imports, all items covered by the licence should be assessed under this scheme, and the importer cannot opt-out for specific items post-registration.

4. Applicability of concessional duty under Notification No. 132/85-Cus:

The Collector held that the concessional assessment under project import regulation was not a bar to availing other concessions under different notifications unless explicitly barred. The respondents had indicated their intention not to avail the project import facility for specific items, which should have been noted by the Assistant Collector during registration. The Vice-President disagreed, stating that once registered under Project Imports, all items must be assessed under this scheme, and the importer's indication to exclude certain items was not permissible without formal amendment of the licence.

5. Misstatement and suppression of facts by the importer:

The Department alleged that the respondents mis-stated and suppressed facts regarding the value of the project and the registration of specific items. The Collector found no evidence of suppression or misstatement, attributing the discrepancies to administrative oversight. The Vice-President, however, emphasized that the importer's indication to exclude certain items was not sufficient without formal amendment, implying potential misstatement.

Separate Judgments:

Member (Judicial):

The appeal was rejected, agreeing with the Collector's findings that there was no short levy and the discrepancies were due to administrative oversight. The Member (Judicial) emphasized that the importer had clearly indicated their intention not to avail the project import facility for certain items, which should have been noted by the Assistant Collector.

Vice-President:

The appeal was allowed by way of remand, arguing that once a contract is registered under Project Imports, all items covered by the licence should be assessed under this scheme. The Vice-President emphasized that the importer's indication to exclude certain items was not permissible without formal amendment of the licence.

Third Member:

The Third Member agreed with the Member (Judicial), noting that the items in question were imported before the registration of the contract under Project Imports, and the importer had clearly indicated their intention not to avail the project import facility for these items. Thus, the appeal filed by Revenue was rejected.