TaxTMI 
TaxTMI 
2005 (9) TMI 183
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.... had an agreement with Kerala State Electricity Board for initial setting up and generation of a power plant at Udyogamandal, Kerala. They completed all the formalities under the Project Imports Regulations with the Customs. As a part of the regulations, they had to register their contract in the Custom House. The assessment is done on a provisional basis. As far as the present case is concerned the appellants found that 3 numbers of rotable hot section assemblies which are very essential for the power generation had to be replaced. It was found by the Customs that the replacements were received and cleared under concessional rate of duty applicable to project imports. However, the replaced items according to the Revenue form part of another independent contract and do not form part of the original contract. It is also seen that the supplier of the replacements is different from the supplier in respect of the original equipments. No doubt the appellants registered the purchase contract for replacement with the Custom House as an amendment to the original contract. According to the Department, this is not permissible. The lower authorities have held that the purchase contract for th....
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....ng up of the plant for which the application for registration was meant. (iii) As per Rule 5(2) of Project Import Regulations, 1986, any importer desiring to claim the benefit of project imports shall get a clearance from the concerned sponsoring authority. In the present case, the sponsoring authority, the Secretary to Government of Kerala has duly certified that the impugned replacement imports are eligible items to be imported under the project imports. Once the sponsoring authority has certified the benefit cannot be denied. (iv) The following decisions were relied on M/s. Shabnam Synthetics Limited v. CCE, Surat [2003 (152) E.L.T. 123 (Tri.-Mumbai)], M/s. Ginni International Limited v. CCE, Jaipur [2002 (139) E.L.T. 172 (Tri. -Delhi)], CCE, Indore v. M/s. Dhar Cements Limited [2000 (121) E.L.T. 720 (Tri.-Delhi) and M/s. R.A. Cement Pvt. Ltd. v. CCE, Allahabad [2003 (161) E.L.T. 964 (T.) = 1999 (34) RLT 623 (Tri.-Delhi)]. (v) Revenue has made no attempt to approach the concerned sponsoring authority to ascertain the entitlement of the eligibility of the impugned....
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....nsaction. But in the present replacement transaction, there is no High Sea Sale and hence there cannot be any High Sea Sale Commission. But the absence of High Sea Sales Commission in the replacement transaction could not be a reason for denying the project import benefit. (xi) With regard to the addition of the value to the extent of US $ 489000 corresponding to the 3 SAC combustors to the transaction value over and above the invoice price, it was submitted that though the purchase order was placed for both the part section assemblies and the extra optional SAC combustors, the appellants have not bought the 3 optional SAC combustors but have purchased only the hard section assembly with inbuilt combustors. The commercial invoice raised by M/s. G.E. on the appellant is the evidence. In the said commercial invoice the inbuilt SAC combustors are individually and separately priced and necessary customs duties have been duly paid on the total value of the invoice including the value of such inbuilt SAC combustors. Disregarding the commercial invoice raised by global gaint none other than M/s. G.E. and alleging that the value of the optional SAC Comb....
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....propriate Custom House in the manner specified in Regulation 5 and such contract or contracts has or have been so registered. A careful reading of the eligibility condition reveals that the primary requirement for extending the benefit of concessional assessment is that the contract should have been registered with the appropriate Custom House. In the present case, it is not the case of the Revenue that the contract has not been registered. In fact, the contract covering all the imports has been registered. All the formalities under the Project Imports Regulation have been fulfilled. It was noticed that the 3 rotor hot section assemblies got damaged. The question raised by the Revenue is that the original supplier of the equipments should have replaced the items free of cost. The appellants in their submissions have given certain reasons for not getting free replacements from the original supplier. They placed an order with M/s. G.E., USA for the supply of the replacements on payment of their appropriate price. The price was also in terms of the contract. The above purchase order contract was also registered with the Custom House. The point made by the Revenue is that this contract....