Tribunal Upholds Duty Demand on Machinery, Orders Pre-deposit

The tribunal dismissed the appellants' contentions on delay, jurisdiction, and the requirement of reconciliation statements. It upheld the demand for duty on the two High Speed Take-up machines and confirmed the violation of Project Import Regulations due to the shifting of machinery. The tribunal also directed the appellants to make a pre-deposit of 50% of the customs duty, considering the financial position of the appellants and the interest of revenue.

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Issues Involved:
1. Delay in initiating proceedings.
2. Jurisdiction of Commissioner of Customs (Import), Mumbai.
3. Requirement of filing reconciliation statement.
4. Demand of duty on two High Speed Take-up machines.
5. Shifting of machinery from PFY plant to PSF plant.
6. Financial hardship and pre-deposit requirement.

Detailed Analysis:

1. Delay in Initiating Proceedings:
The appellants argued that the proceedings were initiated after an inordinate delay of 20 years, which vitiates the demand. They cited various judgments to support their contention that such delays are unreasonable and unlawful. However, the tribunal found that since the assessments were provisional, the time limit for demand of duty does not apply until the finalization of the assessment. The delay was attributed to the appellants' failure to submit necessary documents, and thus, the plea of delay was rejected.

2. Jurisdiction of Commissioner of Customs (Import), Mumbai:
The appellants contended that the Commissioner of Customs (Import), Mumbai, lacked jurisdiction as there was no evidence showing that the clearances for home consumption were effected through Mumbai Port. The tribunal, however, noted that the project contracts were registered at Mumbai Port and finalization of these contracts, including the determination of duty, fell within the jurisdiction of the Commissioner of Customs, Mumbai. Therefore, the contention regarding jurisdiction was dismissed.

3. Requirement of Filing Reconciliation Statement:
The appellants argued that filing a reconciliation statement was not mandatory for imports made prior to January 1992 under the 1965 Regulations. The tribunal referred to Public Notices issued at the relevant time, which clearly required the submission of reconciliation statements within three months of the last shipment clearance. Thus, the tribunal rejected the appellants' argument, stating that the requirement was indeed mandatory.

4. Demand of Duty on Two High Speed Take-up Machines:
The appellants denied the allegation of mis-declaration and argued that the delayed issuance of the show-cause notice had incapacitated them from providing records, which were lost in a fire. The tribunal found that the assessments were provisional and the appellants had failed to submit necessary documents for finalization. Hence, the demand for duty on the two High Speed Take-up machines was upheld.

5. Shifting of Machinery from PFY Plant to PSF Plant:
The appellants claimed that shifting machinery did not violate the Project Import Regulations. However, the tribunal noted that the appellants had sought post facto approval for the transfer, indicating a violation of the terms and conditions of the Project Import Regulations. The tribunal cited relevant judgments to support the view that such shifting disqualifies the concessional rate of duty benefits under the Project Import Regulations. Consequently, the appellants' contention was rejected.

6. Financial Hardship and Pre-deposit Requirement:
The appellants claimed financial hardship and submitted a balance sheet to support their plea for waiver of pre-deposit. The tribunal, upon reviewing the balance sheet, found that the appellants had sufficient cash and bank balance. Considering the interest of revenue, the tribunal directed the appellants to make a pre-deposit of 50% of the customs duty confirmed within eight weeks, failing which the appeal would not be entertained.

Conclusion:
The tribunal dismissed the appellants' contentions on delay, jurisdiction, and the requirement of reconciliation statements. It upheld the demand for duty on the two High Speed Take-up machines and confirmed the violation of Project Import Regulations due to the shifting of machinery. The tribunal also directed the appellants to make a pre-deposit of 50% of the customs duty, considering the financial position of the appellants and the interest of revenue.

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