1998 (5) TMI 124 - AT - Customs

Appeal Dismissed: Contract Registration Rejection for Project Import Dies & Spares

SHRIRAM HONDA POWER EQUIPMENT LTD. Versus COMMR. OF CUS., BOMBAY

SHRIRAM HONDA POWER EQUIPMENT LTD. Versus COMMR. OF CUS., BOMBAY - 1998 (104) E.L.T. 28 (Tribunal) Issues:- Rejection of request for registration of contract under Project Import for import of dies and spares for manufacture of rotors and stators.- Interpretation of Tariff Heading 98.01 of the Customs Tariff.- Applicability of case law on initial setting up of a project.Analysis:1. The appeal was filed against the rejection of the request for registration of a contract under Project Import for importing dies and spares for the manufacture of rotors and stators. The appellants had initially applied for registration for setting up a project for manufacturing portable generator sets, which was approved. However, the request for importing dies and spares was made later, and the appellants argued that these were essential parts of the generator set.2. The appellants contended that the dies were necessary for the initial setting up of stators and rotors for their manufacturing unit. They cited a decision from the Hon'ble High Court at Calcutta to support their argument that the initial setting up of a project is not inconsistent with phased implementation. They emphasized that the dies were crucial for progressive indigenisation at their project.3. The Customs Tariff under Heading 98.01 provides concessional duty rates for machinery, instruments, and components required for the initial setting up or substantial expansion of a unit. The Tribunal noted that the dies and spares were not for the initial setup of the plant for portable generator sets, as production had already commenced before the request. Therefore, the appellants did not qualify for the concessional duty under this provision.4. The Tribunal distinguished the present case from the case law cited by the appellants, where gas cylinders were deemed necessary for obtaining full licensed capacity. In this instance, the dies were not claimed to be essential for reaching full capacity but for indigenisation purposes. The Tribunal found that the dies were not for substantial expansion of the existing unit either, leading to the dismissal of the appeal.5. Ultimately, the Tribunal concluded that the appellants' request for registration of the contract for importing dies and spares did not align with the requirements for concessional duty under Tariff Heading 98.01. As the dies were not for the initial setup or substantial expansion of the manufacturing unit, the appeal was dismissed based on the lack of eligibility for the concessional duty benefit.This detailed analysis of the judgment from the Appellate Tribunal CEGAT, New Delhi highlights the issues involved, the arguments presented by the parties, the interpretation of relevant legal provisions, and the ultimate decision rendered by the Tribunal.