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TMI Blog1997 (12) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... to be imported for meeting the targeted production of dissolved acetylene (DA) gas plant already commissioned in July, 1985. The Heading No. 98.01 of the Customs Tariff related to the project imports attracting concessional rate of customs duty. The ground on which the benefit of project imports was sought was that the initial setting up of the plant, was not completed. The appellants had placed purchase order dated 18-3-1988 on the foreign suppliers for import of the above cylinders and applied for registration of their purchase order with the Customs under the Project Imports Regulations, 1986 on 25-1-1988. The application was rejected by the Asstt. Collector of Customs, Calcutta, on the ground that admittedly the commissioning of the pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s). 5. We have carefully considered the matter. OAPL were granted an industrial licence (carry on business) on 22-9-1984 by the Ministry of Industry, Department of Industrial Development, for setting up a project for the manufacture of oxygen gas and D.A. gas with the following provisional installed capacity : Oxygen Gas ................................. 1 million cu.m. D.A. Gas ...................................... 0.20 million cu.m. 6. According to para 5 of the Industrial Licence, the undertaking was to be completed and commercial production established within a period of one year from the date of issue of the Industrial Licence. The Industrial Licence was issued on 22-9-1984. In para 3 of the lice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the plant and recommended for grant of concessional rate of customs duty under project imports Heading No. 98.01. In the meanwhile, the OAPL had placed purchase order on 18-3-1988 with the foreign suppliers for import of 900 numbers of DA gas cylinders of 40 litres water capacity. On 25-1-1989 an application was filed with the Asstt. Collector of Customs for registration of the contract which was dated 18-3-1988 on the ground that the cylinders were required for initial setting up of the project. 7. According to para 5 of the industrial licence, the undertaking was to be completed and commercial production established within a period of one year from the date of issue of the industrial licence which in this case was dated 22-9-1984. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an industrial licence No. IL 317(84), dated 22-9-1984 for manufacture of industrial gases. On the basis of our recommendation for import of cylinders, office of the CCI E have issued import licence No. P/CG/2042673, dated 20-1-1988 for import of 900 nos. of empty DA cylinders of 40 litre water capacity for a total cif value of Rs. 11,62,100/-. These cylinders are required for initial setting up of the plant. As such this office recommends the concessional rate of customs duty under Para 98.01 of Indian Tariff Customs Act, 1986-87 in favour of M/s. Orissa Air Products Ltd. Kindly note that earlier recommendations issued vide this office of even number dated 16-5-1988 in respect of 900 nos. of empty DA gas cylinders of 45 litre water capac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is case establish that the import of the DA gas cylinders was part of the initial setting up of the undertaking for meeting the requirements of licensed capacity. This was the first import of DA gas cylinders in this case. 11. We find that in the case of Asiatic Oxygen Ltd. v. Asstt. Collector of Customs - 1992 (57) E.L.T. 563 (Cal.), the Calcutta High Court had observed that the setting up in the context of Project Imports meant to complete and that the phrase initial setting up was not in consistent with phased implementation. The High Court had also observed that the recommendations of the DGTD could not be dismissed. Paras 14, 15, 16 17 from that judgment are extracted below : 14. Secondly the Customs Authorities cannot dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber that when a provision is made in the context of a law providing for concessional rates of tax for the purpose of encouraging an industrial activity a liberal construction should be put upon the language of the statute. 17. Furthermore para 4 of the Project Imports (Registration of Contract) Regulations, 1965 insofar as it is material provides as follows - Assignment of number to the contract. The proper officer shall, on being satisfied that the application is in order, register the contract by entering the particulars thereof in a book kept for the purpose. 12. In view of the above discussion, we consider that the rejection of the request of OAPL for registration of the contract on the grounds taken by the Revenue was not jus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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