2015 (12) TMI 1340 - AT - Customs

Benefit of concessional rate of duty of import under Project Import Regulation, 1986 - Import of machinery for manufacturing pre-recorded audio casettes under Chapter Heading 98.01of the Custom Tariff Act, 1975 - Held that - Even if benefit of Project Imports is denied, the goods were assessable at the same rate of duty in terms of Notification No. 49/95-Cus dated 16/3/1995, Notification no. 90/95-Cus dated 1/9/1995 and Notification No. 36/96-Cus dated 23/7/1996 in respect of their goods falling under Chapter Heading 84.79. During the course of arguments it became clear that the goods in question would otherwise get classified under chapter heading 84.79 and the machinery for production of commodities falling under this Heading is exempted under above Notifications. This issue has not been addressed by the Commissioner. - same concessional rate of duty would have been available to the appellant if they had imported goods under chapter heading 84.79 and not as Project Imports under Chapter heading 98.01, we condone the lapses in following Project Import Regulations and allow substantial benefit which in any case would have been available - Decided in favour of assessee.

Summary

Issues:
- Denial of benefit of concessional rate of duty under Project Import Regulation, 1986
- Non-fulfillment of conditions of Project Import Regulations
- Import of machinery under Chapter Heading 98.01
- Failure to submit reconciliation statement and installation certificate
- Shifting of imported machinery without informing Customs authorities
- Failure to reach production level for availing concessional rate of duty
- Applicability of Notifications No. 49/95-Cus, No. 90/95-Cus, and No. 36/96-Cus
- Classification of goods under Chapter Heading 84.79

Analysis:

The appeal in this case stemmed from the denial of the benefit of concessional duty rate under the Project Import Regulation, 1986, due to the non-fulfillment of conditions. The appellant had imported machinery for manufacturing pre-recorded audio cassettes under Chapter Heading 98.01 of the Custom Tariff Act, 1975. However, it was noted that several conditions of the Project Import Regulations were not met, including the failure to submit a reconciliation statement, provide original documents, submit an installation certificate, and inform Customs authorities about the shifting of machinery.

The Ld. Commissioner had passed an order confirming duty demand, confiscating goods, imposing penalties, and ordering the execution of a bond for dues recovery. The appellant argued that they had used the machinery for production for 10 years until technical progress rendered their business unviable. They contended that the denial of Project Import benefits should not hinder the assessment of goods at the same duty rate under specific notifications related to Chapter Heading 84.79, which exempted machinery for production under said chapter.

Upon examination, it was revealed that the goods in question could have been classified under Chapter Heading 84.79, making them eligible for duty exemptions under relevant notifications. The Tribunal, therefore, decided to overlook the lapses in complying with Project Import Regulations and granted the substantial benefit that would have been available under the aforementioned notifications had the goods been imported under Chapter Heading 84.79 instead of 98.01. Consequently, the impugned order was set aside, and the appeal was allowed.