2015 (10) TMI 198 - AT - Customs

High Court: Installation Certificate not mandatory for concessional rates under Project Import Regulations, 1986. Precedent decisions crucial.

The Hon'ble High Court of Andhra Pradesh ruled in favor of the appellant, holding that the Installation Certificate was not mandatory for availing ... Denial of Concessional rate – Non-compliance of Project Import Regulations, 1986 – In terms of Project Import Regulations, 1986, appellant imported Photo Composing System and Agfa Type Setting Equipment availing benefit of Notification No. 91/94-Cus – 20 Bills of Entry were provisionally assessed on payment of concessional rate of duty which were finalized denying concessional rate on ground that appellant had not complied with requirement as per Regulation 7 – Held that:- From Regulation, it is quite clear that what is required to be submitted within three months is reconciliation statement to enable authorities to verify whether deference between total value of imports and total quantity of imports has been paid correctly or not – Admittedly Regulation 7 is not condition for determining eligibility to concessional rate of duty – Appellant has produced Installation Certificate in first round of litigation and copies were produced before Commissioner (Appeals) in second round and when copies are taken, naturally they are taken on fresh paper – Therefore benefit of exemption notification cannot be denied on ground that Installation Certificate has not been produced – In absence of any evidence showing that equipment was not installed, appeals have to be allowed with consequential relief – Appeals allowed – Decided in favour of Assesse. Issues:1. Denial of concessional rate of duty due to non-compliance with submission of Installation Certificate under Project Import Regulations, 1986.2. Listing error of appeals for consideration.3. Interpretation of Regulation 7 of Project Imports Regulation, 1986 regarding the requirement of Installation Certificate.4. Validity of Installation Certificate and its impact on the eligibility for concessional rate of duty.5. Precedent decisions and their applicability in the current case.6. Observations by Commissioner (Appeals) regarding the Installation Certificate.7. Benefit of exemption notification based on the High Court's decision.Analysis:The appellant registered Project Import Contracts for importing equipment for their Printing unit under Project Import Regulations, 1986, availing benefits of a specific Notification. The provisional assessments were later finalized, denying the concessional rate of duty due to the alleged non-compliance with the submission of Installation Certificate as per Regulation 7. Initially, the lower authorities upheld this denial, but the Tribunal and subsequently the Hon'ble High Court of Andhra Pradesh ruled that the Installation Certificate was not required, leading to the finality of the matter.During the hearing, a listing error of appeals was noted, and additional appeals were taken up for consideration. The main contention revolved around the interpretation of Regulation 7, with the Revenue arguing that the Installation Certificate was essential for availing benefits. However, the High Court's decision emphasized that Regulation 7 did not mandate the production of an Installation Certificate to determine eligibility for concessional rates.The Commissioner (Appeals) raised concerns about the validity of the Installation Certificate, deeming it unreliable and incomplete. The appellant explained that the new appearance of the certificate was due to fresh copies being presented. Ultimately, following the High Court's decision and considering the lack of evidence regarding non-installation of equipment, the appeals were allowed with consequential relief to the appellant, emphasizing the importance of precedent decisions in similar cases.In conclusion, the judgment highlighted the significance of adhering to legal interpretations, especially when supported by higher court decisions, and emphasized the need for substantial evidence before denying benefits based on technicalities like the Installation Certificate requirement under the Project Import Regulations, 1986.