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TMI Blog2012 (8) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... s, 1986 under the Customs Tariff Heading 98.01, but if they filed the contract in second phase they are not entitled this is not acceptable, thus the appellants are entitled for the benefit of the Project Import in the second phase also. As appellant has complied with the condition of the Project Import Regulations, 1986 therefore the appellants have not violated the provisions of Section 111 (o) of the Customs Act, 1962. Therefore, the 170 computers against which the duty has been confirmed are not liable for confiscation. When the goods are not liable for confiscation, penalty under Section 112 ibid is not leviable. Accordingly, redemption fine and penalty are also set aside. As the appellant has conceded to the demand of 170 computers which were installed in their factory, therefore the demand against those computers which are in their office is confirmed. - C/621/09 - A/566/2012-WZB/C-I(CSTB) - Dated:- 2-7-2012 - Mr.Ashok Jindal, Mr. P.R. Chandrasekharan, JJ. For Appellant: Mr. J.C. Patel, Advocate For Respondent: Mr. V.K. Singh, Additional Commissioner (AR) Per: Ashok Jindal 1. The appellant, namely M/s Saurashtra Cement Ltd, has filed this appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 8.63 lac Tons per annum to 9.97 lac tons per annum and thereafter imported goods were required for substantial expansion in second phase from 30.6.2005 onwards. Therefore, appellant applied vide letters dated 27.4.1995 and 16.5.1995 to the sponsoring authority i.e. Ministry of Industry, Cement Division, for issuing the essentiality certificate/recommendation under the Project Import Regulations, 1986 in respect of the imported goods. By the said letters, the appellant had submitted to the sponsoring authority the certificate of the consultant and list of both imported as well as indigenous goods required for the said substantial expansion. On 20th June, 1995 the Sponsoring Authority issued essentiality certificate/recommendation under the Project Import Regulations, 1986 for import of the goods required for the said substantial expansion. On 30.6.1995, the appellant applied for registration of contract for import of goods under the Project Import Regulations, 1986. The contract was provisionally registered against the security deposit of Rs 50 lacs and the same was paid in July, 1995. During the period July 1995 to November, 1995 the imported goods were cleared under the Project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Import Regulations, 1986 and liable for confiscation under Section 111 (o) of the Customs Act, 1962; and (b) that the essentiality certificate and other documents merely talks of increase in the installed capacity and did not specify whether the increase was in the installed capacity or actual production. 5. The assessee contended that requirement of Project Import Regulation for substantial expansion is that there should be increase of more than 25% in the installed capacity. Thereafter vide order dated 27.7.2006 the Commissioner held that the benefit of the Project Import cannot be denied on the ground of late submission of reconciliation certificate as the same has been submitted before finalization of contract but with regard to 170 computers installed in the office, the same were confiscated and a redemption fine of Rs. 20 lakhs was imposed and duty of Rs. 50,33,318/- was also confirmed in that respect. A penalty of Rs. 50 lakhs was also imposed. But with regard to the issue of increase in the installed capacity, the Commissioner did not dispute the increase in the installed capacity but decided the matter holding that import was only for second phase expansion that is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and supported the impugned order and drew our attention to their application for registration of contract under Chapter Heading No. 9801.00 read with Notification No. 90/2004-Cus and No. 91/2004-Cus column 6 (c) wherein the appellant has shown the installed capacity as 8.63 lacs ton per annum and proposed addition was 4.31 lacs tons per annum but in their annual report for the year 1994-95 they have shown the installed capacity at the end of financial year as 9.96 lacs tons per annum. Therefore, it is an admitted fact that at the time of registration of contract with Customs, the installed capacity of the appellant was 9.96 lacs tons per annum an not 8.63 lacs tons per annum. Therefore, the adjudicating authority has rightly denied the benefit of Project Import. For rest of the issue, he reiterates the impugned order. 10. Heard both sides in detail and considered their submissions. 11. As the appellant has conceded to the demand of 170 computers which were installed in their factory, therefore we are not dealing with the issue and the demand against those computers which are in their office is confirmed. As the same can be adjusted from the amount already deposited by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Government Agency") as soon as clearance from the concerned Administrative Ministry or Department, as the case may be, has been obtained. (3) The application shall specify - (a) the location of the plant or project; (b) the description of the articles to be manufactured, produced, mined or explored; (c) the installed or designed capacity of the plant or project and in the case of substantial expansion of an existing plant or project the installed capacity and the proposed addition thereto; (d) such other particulars as may be considered necessary by the proper officer for purposes of assessment under the said heading. (4) The application shall be accompanied by the original deed of contract together with a true copy thereof, the import trade control licence, wherever required, and an approved list of items from the Directorate General of Technical Development or the concerned sponsoring authority. (5) The importer shall also furnish such other documents or other particulars as may be required by the proper officer in connection with the registration of contract. (6) The proper officer shall, on being satisfied that the application in the order register the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment with an installed capacity from 8,63,000 tons per annum to 11,94,000 tonns per annum (after expansion) i.e. additional capacity of 4,31,000 tons per annum. Due to technical reasons, the company could raise the capacity to 11,64,000 tons only. This constitutes more than 25% required for substantial expansion to be eligible for concessional rate of duty under project import. From the said certificate, it is clear that at the time of filing the memorandum for substantial expansion of the installed capacity of the project, the appellant had achieved the target of more than 25% which is required for substantial expansion. Further the contention of the learned Additional Commissioner (AR) that at the time of registration of the contract the installed capacity was 9.97 lacs tons per annum is not justifified because of the reason that the substantial expansion on the installed capacity took place from 8.63 lacs tons per annum to 11.29 lacs tons per annum. A project is to be seen as a whole and not in phased manner. The same was dealt with by the Hon ble High Court in the case of Asiatic Oxygen Ltd vs Assistant Collector (supra) wherein the Hon ble High Court has observed as under: 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner, the customs authorities should also give the same interpretation to the same phrase for the purpose of Customs duty. 15. In another decision of the CEGAT in Collector of Customs, Bombay v. Bharat Heavy Electricals Ltd. reported in 1984 (17) E.L.T. 525 it was held - These licences having been endorsed as Project Import, there was no reason for the Assistant Collector to deny the registration of the contract. 16. I also accept the contention of the petitioners that the obvious object behind Heading No. 84.66 was to promote industrialization. Therefore the Heading 84.66 must be construed liberally. As stated by the Supreme Court in the Straw Boards case (supra). It is necessary to remember 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. 15. In the case of Zuari Industries Ltd vs CCE (supra) the Hon ble apex court has observed as follows:- 9. Firstly, on the facts we find that the assessee had given to the Sponsoring Ministry its entire Project Report. In that report they had indicated that for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) held that while initial pertains to the first stage, it could not be said that with the start of the commercial production in a case of this nature where production of gas will depend upon the availability of the cylinders for its packing, the first stage is already over. The facts of this 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. Therefore, the request of the appellants for registration of the contract was justified. 18. It was further observed that the commissioning of the plant does not necessarily mean that all the parts of the unit had been fully established and the capacity to meet the targeted production had been achieved. A unit may be commissioned even before the trial production. Even when commercial production had started, it may so happen that its rated capacity is yet to be utilized. 19. From the above observation, in this case, we find the appellant had the program of substantial expansion of the Project Import in 1992 from 8.63 lacs tons per annum to 11.29 lacs tons per annum an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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