2001(03)LCX0144
IN THE CEGAT, SOUTH ZONAL BENCH, BANGALORE
S/Shri G.A. Brahma Deva, Member (J) and S.S. Sekhon, Member (T)
LAXMI ELECTRONICS MOULDS & PRECISION ENGG. PVT. LTD.
Final Order No. 331/2001, dated 1-3-2001 in Appeal No. C/263/94
CASE CITED
Zenith Electronics Ltd. v. Collector — 1985(01)LCX0031 Eq 1985 (021) ELT 0273 (Tribunal) — Referred.............. [Para 2]
Advocated By : S/Shri Arogyaswamy, Consultant and M. Suresh Kumar, C.A., for the Appellant.
Smt. Radha Arun, SDR, for the Respondent.
[Order per : S.S. Sekhon, Member (T) ]. - The Assistant Collector had issued the order on finalization of the ‘Project Import’ BE No. 229/ 5-4-1991 under Section 18(2) of the Customs Act 1962, denying the benefit of ‘Project Import Regulation 1986 benefit and ordered assessment on merits and consequential short levy recovery of duty of Rs 26,28,291/- from the appellants on the ground that the appellants unit does not fall either under initial setting up or under substantial expansion and it falls under diversification of product which was not eligible for the ‘Project Import’ benefits, since appellants were manufacturing of Coil Transformers, Press Components/Tools Dies earlier and started producing sockets 11-C & Co-axial connectors after importing the CNC wire Cutting Electrical Discharge Machine.
2. The Commissioner (Appeals), considered the claim of assessment under Tariff head 9801 read with Notificafion No 315-Cus., dated. 26-11-1983 and found that even though all procedural aspects and conditions were met, except that whether the import was for ‘diversification’ or substantial expansion. He found, for starting a new unit, they imported ‘CNC Wire Cutting Electrical Discharge Machine’. They had a licence for manufacture of certain items in 1987 and they diversified into electronic component side during 1990. Evidently, the unit, did not fall under initial setting up or substantial expansion nor was a diversification. Even if it was considered a new activity, it was a case of a ‘new unit’ and not ‘a Project’. They had imported only one machine not three, as per project report and certificates with them and plea of scarce foreign exchange was not substantiated and plea of indigenous machine used with imported are not relevant. He disregarded the case laws cited (1985 (021) ELT 273) being applicable for expansion and also the plea that once ‘project is registered’ by the Assistant Collector, he could not review his own order by treating the assessment as provisional. He accepted the plea of the appellants on the question of relief in duty, not being correctly applied and remanded the matter to the Assistant Collector for red-etermination of the classification and rate of duty on machinery and spare parts.
3. After hearing both sides on this appeal, against the order of Commissioner (Appeals) and considering the matter, we find :-
(a) We do not find any force in the ground that once a Contract is Registered, by the Assistant Collector and communicated, the same cannot be reviewed by another Assistant Collector. The Project Imports Regulation 1986, govern the classification of the imports under Heading 9801.00 vide Chapter note 02 to Chapter 98 of Customs Tarrif; the definition under the Regulations have to be applied to the expressions used in the heading. Since the definition under Regulation 3a(ii) does not include a “single machine” under the term “industrial plant”, we do find the logic of the Commissioner (Appeals) to appeal to us and find that import of a single machine in this case under 9801 not allowed. However, we cannot find the defect in the proper officer to have registered the contract, since the project report was for 3 machines.
(b) The final assessments of customs are made 3 months after the last clearance as provided by Regulation 7. Therefore the Registration is being finalised under Regulation 7 and the assessments since this finalisafion, are provisional. There is no bar on the assessments being finalised by the proper officer under Section 18(2).
(c) We have considered the plea, that no bond was executed under Section 18, a perusal of Section 18 does not indicate that the order of provisional assessments thereon should be, along with and necessarily to be on execution of a bond.
(d) Since, under Project Imports, it is the classification and not necessarily the value being contested; non-disturbance of the value as pleased by the appellants in this case will not impugne the right of the proper officer to finalise the assessment as regards the classification, as in this case.
(e) We find no merits in this appeal.
4. In view of our findings, the appeal is dismissed.
Equivalent 2001 (131) ELT 267 (Tri. - Bang.)