TaxTMI 
TaxTMI 
2009 (4) TMI 661
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....he goods under heading 84.62 of the Customs Tariff Act. 2. The facts of the case are that the appellants are engaged in the manufacture of automobile seats in their plant which as per the appellants consist of three units viz. EU Section, Welding & Bending Section and Assembly Section. The appellants intended to expand their plant substantially for which they intended to import goods. The appellants accordingly made an application for registration of contract to the Assistant Commissioner of Customs (Project Imports) and the said contract was registered as contract No. 8/94. 3. The appellants imported one CNC Bending machine vide bill of entry No. 000569 dated 17-1-1995 which was provisionally assessed under heading 98.01 read w....
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.... appellants submit that lower authorities erred in interpreting heading 98.01 of the Customs Tariff read with Project Import Regulations. Chapter Note 2 to Chapter 98 provides that heading 98.01 is to be taken to apply to all goods which are imported in accordance with regulations viz. Project Import Regulations. Heading 98.01 covers all items of machinery required for the initial setting up of a unit or the substantial expansion of an existing unit. Regulation 3(c) of Project Import Regulation defines "unit" to mean any self contained portion of an industrial plant or any self contained portion of a project specified under the said heading no. 98.01 and having in independent function in the execution of the said project. It is to be theref....
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....lled capacity by not less than 25%. Thus, it is clear that the expansion in the present case is 25% i.e. not less than 25% and hence there is substantial expansion of the unit. This submission of the appellants has not been rebutted by the Commissioner (Appeals) in the impugned order. Therefore, the goods imported by the appellants merit classification under heading 98.01 and is eligible for exemption under Notification No. 90/94-Cus., dated 1-3-1994. 5(c). The alternative plea of the appellants is that appellants are eligible for the benefit of Notification No. 63/94-Cus., dated 1-3-1994 which provides effective rate of duty of goods falling under heading 84.66 as 35% adv. and for goods falling under heading 84.62 as 45% adv. in case....
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....egulations made under Section 157 of the Customs Act, 1962 (52 of 1962) and expressions used in this heading shall have the meaning assigned to them in the said regulations." Therefore the import has to be in accordance with the regulations. The regulations also require that there should be a contract, the contract should be registered, if there is any modification, importer has to make an application and register the amendments in the contract and within three months from the date of clearance for home consumption of the last consignment of the goods, the contract has to be finalized. Therefore what we are required to examine is whether the appellants have fulfilled the conditions of the regulations which is not limited to the expansion o....
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....n a position to carry out the proposed expansion of their existing plant and sought finalization of the provisional assessment. The total project import value according to this letter was more than 107 million (approximately) Japanese Yen whereas the appellants had imported only one CNC machine valued at more than 18 million Japanese Yen only. We find that in another letter dated 12-4-2002, the appellants explained: "manufacturing process of seat assembly for automobiles can be broadly divided into the following major operations." 1. PU Moulding of Seat cushions. 2. Tube Bending, Welding and Frame production. 3. Seat Cover quilting, sitting and stitching etc. 4. Assembly & Testing. Equipment for a total value of Japanese Yen 1 or 6 mil....
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....ased to the extent of 25% from 1994-95 to 1998-99 which is more than 5 years after the import of CNC machine. Other than the statement of the appellants that they have the capacity to produce two lakh seats per annum and the certificate of the Chartered Engineer, there is no other evidence to show that there was actual increase in capacity during the above period. In fact even the Chartered Engineer's certificate says that the CNC machine imported has contributed to substantial increase. It does not say that it is an independent unit as contended by the appellants. Thus on facts discussed above, the import of CNC bending machine has not contributed to any expansion and other equipments which were required have been leased by Maruti Udyog Lt....