TaxTMI 
TaxTMI 
2018 (6) TMI 21
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....ith C.K.D Blansko, Sigma Group a.s., and C.K.D. NoveEnergoa.s. for supply of equipments and setting up of the pump stations.In the meanwhile due to financial constraints of M/s Jyothi, NCC and HCC opened the LC with the foreign suppliers and made an application for registration under the project import under the category water supply project.The Adjudicating Authority denied the registration holding that there was no contract between the importer and the supplier and that the project is an irrigation project and not a water supply project.Aggrieved by the said order M/s. HCC and M/s NCC filed an appeal before the Hon'ble Commissioner of Customs (Appeal), Mumbai who set aside the Order in original and allowed their appeal. Hence this appeal has been filed by the revenue. 2. Ld AR argued that as per Regulation 4 of the PIR-1986 the assessment under the heading No. 98.01 shall be available only to those goods which are imported (whether in one or more than one consignment) against one or more specific contracts which have been registered in accordance with the PIR-1986. She argued that it obviously means that the contract should relate directly to those goods which are proposed to be....
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....d that water supply project in respect of Project Imports would mean only water treatment plants. 2.3 She further argued that the essential requirement of the water supply project specified in SI. No. 26A of Notification No. 42/96-Cus dated 23.07.1996 and Notification No. 14/2004-Cus dated 08.01.2004 is that it should be capable of making the water fit for industrial or agricultural use. She argued that only projects like a which derive its source from the effluent water, brackish water etc., and treat it so as to make it fit for industrial or agricultural use are covered. She argued that ehe present Project is a Lift Irrigation Project which simply lifts/pumps/transports water from the river to the irrigation area. So it is not a project intended to make water fit for agricultural useand therefore it is not covered within the scope of Water Supply Project under SI. No. 26A of Notification No. 42/96-Cus dated 23.07.1996 and Notification No. 14/2004-Cus dated 08.01.2004. She argued that as per the ratio of M/s. Pratibha Industries Ltd. the same is not a water supply project. 2.4 She also placed reliance on the judgement of J.V.Gokal& Co. 2017 (348) ELT. 445 (Bom.) wherein it was h....
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....contrary are trying to take one part of the whole project i.e. Godavai Lift Irrigation Scheme and show the same as an individual project to claim exemption. Their whole argument is against the principles laid down by the Hon'ble Supreme Court in the case of M/s Zuari Industries Ltd. (Supra). 3. Ld counsel argued that the assessment of the imported goods under project import be finalized as it is extending the project import benefit and the department's present appeals be dismissed without going into the questions raised by the Department. He placed reliance on the following decisions: (i) Jain Irrigation Systems Ltd. vs. CCE - 2016 (343) ELT 562 (T);Affirmed by Supreme Court in 2017 (345) ELT A70 (SC) (ii) Eddy Cranes Engineers vs. CCE - 2018 TIOL 542 CESTAT MUM 3.1 Ld Counsel argued that according to the department, an importer can register contract with foreign suppliers alone under Regulations 4 and 5. He argued that the regulation 4 prescribes "assessment under the said heading 98.01 shall be available only to those goods which are imported (whether in one or more than one consignment) against one or more specific contract, which have been registered with the appropriate ....
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....nd in fact the equipment is for water supply project for agricultural use as described in the corrigendum issued by the sponsoring authority. The Respondents were to supply the equipment/goods for various pumping stations covered in the Godavari Lift Irrigation Project. The sponsoring authority has stated that the supplies of goods for pumping stations by the Respondents under the project is eligible for the benefit of the Customs Notification No. 14/2004-Cus. dated 08.01.2004 and Tariff Heading 9801, after duly examining the nature of the goods imported by the Respondents for such supplies. 3.4 He argued that the goods imported in the present case is parts for setting up pumping stations for water supply project for irrigation. Exemption is available to machinery/equipment for the purpose of "water supply project for irrigation". Certainly, parts of pumping stations used for pumping water from the river to the field is machinery/equipment for the purpose of "water supply project for irrigation". Thus, the decision of the Tribunal in the case Pratibha is not invokable in the present case. He argued that the CESTAT in Pratibha (Supra) interpreted the definition of "drinking water s....
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.... of the goods, it can be said that the Sponsoring Authority has after due consideration has recommended the project for the benefits of the PIR, CTH 98.01 and Customs Notification No. 14/2004-Cus. The Hon'ble Supreme Court in the case of Zuari Industries Ltd. v. CC - 2007 (210) ELT 648 (SC) had in favour of the assessee and held that the it is not necessary to examine those authorities on interpretation. He argued that the Customs authorities cannot go beyond the certificate of the sponsoring authority and deny the benefit of the Project Import once it is validly issued by the sponsoring authority. Further, the Revenue cannot go behind the certificate of the Project Authority and deny the benefit of the exemption under project import. 3.7 He pointed out that the decision of Supreme Court in Zuari (supra) has been followed by the CESTAT in the context of water supply projects, in the following cases: a) CC vs. Rochem Separation System India Ltd.2015 (251) ELT 438 (T) b) IMS Petrogas Ltd. vs. CC2017-TIOL-686-CESTAT-MUM 3.8 He further argued that the objection that the project in question is an irrigation project and not water supply project for agriculture was not a ground rais....
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.... Engineer addressed to District Collector Warangal which reads as follows. "I have to submit that the Godavari Lift Irrigation Project is being implemented by Irrigation and C.A.D. Department under J. Chokka Rao Godavari Lift Irrigation Project Circle, Warangal. The J. Chokka Rao Godavari Lift Irrigation Project Phase-II has been taken up to provide immediate relief to the drought prone areas of Cherial, R.S. Ghanpur and Jangaon constituencies of Warangal District. It is proposed to lift 14 cumecs of water from Godavari River at Gangaram (V), Eturunagaram (M), Warrangal District, Andhra Pradesh with single steel pipeline with 3000mm, 2500mm, 2000mm diameter connecting i) from Intake to Dharmasagar via Bhimghanpuram, Salivagu, ii) from R.S. Ghanpur to Chittakodur via Aswaraopally, iii) from Dharamsagar to Tapaspally via Gandiramaram and Bommakur, to irrigate an ayacut of 2.85 lakh acres with 7 stage lifting in a distance of 196.85 Kms. To introduce flexibility in the system during operation each pipeline is supported by 2 Nos. of pump sets at each pumping station. The water conductor system of the scheme runs through the territories of Warangal District, Intermediate tanks of th....
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.... 'Water Supply Project' has been described in the explanation. Thus the facts of case are different. 4.3 The next argument of revenue was that even if it is a water supply project it would merit classification as Irrigation project as it is part of an irrigation project. Reliance was placed on the decision of Hon'ble Apex Court in case of ZUARI INDUSTRIES LTD, 2007 (210) E.L.T. 648 (S.C.). In the said case it was held that in a power plant is imported as a part of Fertiliser Plant than the entire project would be classified as Fertiliser plant. In other word if a power plant is imported along with the fertiliser plant as part of common project then it would be classified as fertiliser project.Hon'be Apex Court observed as follows. 9. Firstly, on the facts we find that the assessee had given to the Sponsoring Ministry its entire Project Report. In that report they had indicated that for the expansion of the fertilizer project they needed an extra item of capital goods, namely, 6MW Captive Power Plant. In their application, the assessee had made it clear that the fertilizer project was dependant on continuous flow of electricity, which could be provided by such Captive Power Plant....
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.... Act, 1975, the assessment is for the Project. As stated above, Heading 98.01 is the specific entry applicable in the case of the Project Imports. An item like a power plant could be in a given case an independent Plant. Generally, it is a stand-alone equipment. However, when it becomes a part of the entire Project/System, the same power plant can also become one of the items of capital goods. The essentiality certificate given by the Sponsoring Ministry has treated Captive Power Plant, in this case, as "capital goods" along with 13 other items. The assessee has also treated the Captive Power Plant as one of the capital goods required for the expansion of the fertilizer project. In the above circumstances, all the items in the list annexed to the certificate have been certified and recommended by the Sponsoring Ministry as the entire capital goods required for the substantial expansion of the fertilizer project. Therefore, in our view, the assessee is right in its contention that, in this case, 6MW Captive Power Plant is one of the items out of 14 items constituting capital goods required for the substantial expansion of the fertilizer project, and, therefore, it fell under Serial ....