2016 (4) TMI 9 - AT - Customs

Eligibility for benefit of reduced Custom duty under Project Import Regulations, 1986 - Goods imported during the period November and December 1986 and benefit of project import regulations were extended - Department contended that appellant has to comply with condition no. 7 of project import regulations - Held that - as regulation no. 7 was not in the statute when the goods were imported, hence it cannot be pressed into service for denying the benefit of project import regulation to the appellant. Therefore, appellant is eligible for benefit of reduced custom duty. - Decided in favour of appellant with consequential relief

Summary

Issues:
- Eligibility for reduced Customs duty under Project Import Regulations, 1986.

Analysis:
The appeal in this case challenged an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Mumbai II, regarding the eligibility of the appellant for reduced Customs duty under the Project Import Regulations, 1986. The main issue was whether the appellant complied with condition No. 7 of the project import regulations, which required the production of a reconciliation statement of the imported goods and proof of installation in the factory. The revenue alleged non-compliance and enforced the bond, demanding payment of &8377; 8,40,000. Both the adjudicating authority and the first appellate authority agreed with the revenue's position. However, the Tribunal found that the condition in question, introduced by notification number 17/92 - CUS dated 7/1/92, was not in force when the goods were imported. Citing precedent cases, the Tribunal held that Regulation 7 was a procedural requirement and not a condition determining eligibility for concessional assessment under the Project Import Regulation.

The Tribunal emphasized that there was no evidence to show that the equipment had not been installed, and the revenue could have verified the facts before denying the concession. The Tribunal also noted a violation of the principles of natural justice as no opportunity for a Show Cause and personal hearing was provided. Relying on the Chartered Engineer's Certificate and the sworn affidavit of the Director of the appellant company, the Tribunal concluded that the appellants were entitled to the concessional rate of assessment. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief. The judgment highlighted the importance of procedural fairness and the need for proper verification before denying benefits under the Project Import Regulations.

In conclusion, the Tribunal found the impugned order unsustainable and set it aside, allowing the appeal with consequential relief. The decision underscored the significance of adhering to procedural requirements and ensuring natural justice in matters concerning eligibility for benefits under specific regulations.