Project import benefit cannot be denied for approved site relocation and pending reconciliation of import documents.

Project import benefit could not be denied, and consequential confiscation, redemption fine, penalty and duty demand could not be sustained, where the project site was relocated with competent State approval due to force majeure conditions and the importer had repeatedly sought regularisation and reconciliation of the import documents. The tribunal found that the adjudication proceeded on an unsustainable assumption of unapproved diversion of goods despite correspondence seeking amendment of the project import records and release of the security deposit. The impugned customs action was therefore set aside, with directions to complete reconciliation and release the security deposit if otherwise admissible.

---

---

Issues: Whether the denial of project import benefits, finalisation of provisional assessment, confiscation of goods, and levy of duty, interest, fine and penalty could be sustained when the project site was relocated with the approval of the State authorities and the import documents were pending reconciliation.

Analysis: The imported machinery had been registered for two hydro-electric projects and the relocation of one project from Dus Nallah to Teepani was approved by the State Government in view of flash floods and the resulting force majeure situation. The record also showed correspondence seeking amendment and regularisation of the project import documents and repeated requests by the importer for reconciliation and release of the security deposit. In these circumstances, the adjudication order denying the project import benefit and proceeding on the footing of an unapproved diversion of goods was found to be unsustainable.

Conclusion: The denial of project import benefits and the consequential confiscation, redemption fine, penalty and duty demand were set aside. The department was directed to complete reconciliation and thereafter release the security deposit if otherwise admissible.

Final Conclusion: The appeal succeeded and the importer was granted relief against the impugned customs adjudication, with consequential directions for reconciliation and release of the security deposit.

Ratio Decidendi: Where relocation of a project import site is approved by the competent State authority and the importer has sought regularisation and reconciliation of the import documents, denial of project import benefit and consequential penal action cannot be sustained merely on the basis of the original site mismatch.

---