9911796707
TMI Blog2007 (3) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... t Regulations, 1986, (PIR), they still had the option to avail any other Notification covering the goods. HPCL had argued that the facility that was being set up by them included crude distillation and fractionation unit as well as catalytic cracking unit which made up a petroleum refinery. Substantial expansion covered also a new unit as per the Industrial Development Regulations Act. The new unit was an independent refinery. The Commissioner found that the appellants already had a refinery with a refining capacity of 4.5 Million Metric Tonnes per annum and they were seeking to expand the capacity by another 3 MMT/annum. The appellants had registered the Vizag Refinery Expansion Project-II under the Project Import Regulations Act for substantial expansion of the refinery. As the name of the project suggested, the new project was only one of expansion of the existing project. She found that the imported items were not enough for setting up of a new refinery. She found that the imported machinery helped enhancing the capacity of the existing plant and that they were not intended to set up an independent refinery. She observed that the Notification clearly envisages duty exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a refinery had been purchased by the appellants and that they had all been installed as new unit dated 21-3-2000. 4. They had submitted a list of items required for setting up a new refinery specific to VREP II configuration to the adjudicating authority. It was submitted that the Notification No. 23/98-Cus dated 2-6-98 extended the benefit of nil rate of Customs duty to goods required for setting up of refinery. The term initial was not there in the entry No. 164 of the Notification. The Notification did not deny the benefit to setting up of an independent and new refinery. The initial setting up was relevant only in the case of Chapter 9801 for project imports. Such a condition was not there in the Notification No. 23/98. The appellate authority had made an observation that it was not their case that the unit set up under the expansion project produced a different item from the existing one. This observation was erroneous as the Notification did not envisage any such condition. The appellants submitted several case law to support their case that the substantial expansion could also be by setting up of a new refinery and that their imports were covered under Notification No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions), 1986 and assessed to Customs duty under Heading 98.01 of the Customs Tariff at the rate of 45% basic plus 45% auxiliary was eligible for assessment at the rate of 35% basic in terms of the Notification No. 40/78-Cus. (as amended) in which at serial No. 23 of the annexed table Extrusion Press falling under Chapter 84 has been specifically mentioned. By its judgment dated April 24, 1992, the Tribunal decided the said question in favour of the assessee on the basis of its earlier judgment in M/s. Eckoplat Pvt. Ltd. v. Collector of Customs, Bombay, decided on February 24, 1992. The Tribunal has placed reliance on the following clause in the Notification dated April 19, 1985 :- Nothing contained in this notification shall affect the exemption granted under any other notification of the Government of India for the time being in force from the duty of customs specified in the said First Schedule in respect of the goods referred to in this notification. The Apex Court decided that the assessee was not precluded from claiming the benefit of the lower rate of Customs duty on the basis of the Notification No. 40/78-Cus. and upheld the decision of the Tribunal. The Court had allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with the help of case law that increasing capacity was possible by setting up an additional refining unit which they had done. We find that as the Notification provides exemption for setting up new refinery it is imperative that a new refinery is set up and that expanding the capacity of various units of the existing refinery will not entitle the appellants to the benefit. The lower authorities had found that the appellants had not imported machinery required for setting up a stand-alone refinery after seeing the comprehensive list of goods, imported and indigenous, required for the purpose furnished by the appellants. 8. The appellants have furnished the following certificate dated 21-3-2000 from M/s. Engineers India Ltd. in proof of their having set up a refinery : We, Engineers India Ltd., as Consultants of VREP-II of M/s. Hindustan Petroleum Corporation Ltd. hereby certify that HPCL, VREP-II have purchased all the goods for setting up of FCCU, CDU etc., constituting a refinery and that they have all been installed as new units. Sd/- Project Manager - VREP-II Further, vide letter dated 17-6-2002 of Petroleum Planning and Analysis Cell of Ministry of Petroleum and N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he benefit of that Notification would not affect the goods being allowed the benefit of any other Notification. In the Final Order No. 635/2006 [2006 (203) E.L.T. 287 (Tribunal)] cited by the learned SDR, the Tribunal had decided that the item impugned in that order was not entitled to the benefit of Central Excise Notification No. 6/2002 as the same was not waste conversion device producing energy which was specified for the benefit. The appellants had sought this benefit in addition to the benefit availed in terms of another Notification for basic customs duty which did not contain a clause allowing the importer to avail benefit of any other Notification as well. In the instant case, HPCL is seeking the benefit of only one Notification unlike in the cases cited by the SDR. They are asking for a different benefit provided in the same Notification than the one they had initially opted to avail. In view of our stand as regards right of the appellants for a different benefit after having initially opted for the project contract procedure, it is necessary to verify that the imported goods were used in setting up a refinery. In the case of MRPL (supra) case MRPL had obtained a separa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants have submitted that they would be using certain infrastructure facilities for the new refinery that was being set up. Also the lower authorities did not have an opportunity to verify whether the appellants had imported and procured indigenous goods required for setting up a refinery. The certificate regarding setting up a refinery by the appellants was issued by Engineers India Ltd. only in the year 2006 whereas the impugned order had been passed in the year 1999. We find that none of the certificates or reports furnished by the appellants described the new facility set up as a refinery. Moreover, now that the impugned goods have been used in the project it is possible to verify the appellants claim. Accordingly we set aside the impugned order and remand the matter to the original authority for taking a fresh decision in the matter after verifying the factual position. The appellants shall be given sufficient opportunity to present their case. Appellants are free to produce the industrial licence if any, granted to them for setting up a new refinery or any specific clarification they have obtained from the Ministry of Petroleum and Natural Gas or Ministry of Finance about th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
