Tribunal grants duty concession to importer in contract registration dispute under Project Import Regulation.

The Tribunal ruled in favor of the appellant, a company importing machinery for a project, in a dispute over duty concession under the Project Import Regulation, 1986. Customs authorities demanded a differential duty due to alleged irregular registration of the contract. The Tribunal held that the registration of the contract before clearance of warehoused goods sufficed for eligibility, rejecting the authorities' claim of non-compliance with Regulation 5. The appellant's appeal was allowed, overturning the lower authorities' decision and providing consequential relief.

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Issues:
Demand of customs duty under Project Import Regulation, 1986 (PIR) for irregularly taken duty concession.

Analysis:
The case involved the appellant, a company engaged in the business of dry cell batteries, who imported machinery for a project at Haridwar, Uttaranchal. The dispute arose when the Customs authorities alleged that the appellant irregularly availed duty concession under Project Import Regulation, 1986 (PIR) as they did not comply with sub-clause (i) of Regulation 5 of the PIR by registering the contracts after importation of the goods and warehousing. The Customs authorities demanded a differential duty amounting to Rs. 31,30,740 due to the irregular registration of the contract. The lower authorities upheld the demand, leading to the appellant filing an appeal challenging the order.

The appellant argued that Regulation 4 of PIR, which determines eligibility for benefits, does not specify a time limit for filing the application for registration of the contract. They contended that the sponsoring authority had certified the eligibility of the imported goods under Project Import, and once certified, the benefit could not be denied. The appellant relied on a previous decision in support of their submission.

Upon review, the Tribunal found that the sponsoring authority had approved the project imports for the appellant in accordance with Customs Notification No.230/86-Cus dated 03.04.1986. It was observed that Regulation 5 was a procedural requirement, not a condition determining eligibility for concessional rates. The Tribunal noted that there was no prescribed time limit for obtaining clearance from the sponsoring authority, as clarified in CBEC's Customs Manual. The Tribunal also highlighted that the registration of the contract could be done before the goods were cleared for home consumption, as per the provisions of Chapter-98 of the Customs Tariff Act and Regulations 4 and 5 of the Project Import Regulation.

Citing a previous case, the Tribunal emphasized that the registration of the contract had to be done before clearance for home consumption, not before depositing in a warehouse. The Tribunal concluded that the appellant had registered the contract before the clearance of the warehoused goods, making them eligible for the benefit of project import. Consequently, the Tribunal set aside the impugned orders and allowed the appeal filed by the appellant, providing consequential relief.

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