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2014 (3) TMI 798 - AT - CustomsDenial of benefit of Project Import Concession under CTH 9801 - import of raw materials in excess of the quantity required - import of raw material after finished goods (transformers) manufactured and dispatched - one-to-one co-relation between raw material (inputs) and finished goods - Confiscation of goods - Redemption fine - Difference of opinion - Majority order - Held that:- This condition implies that materials imported for one unit of a specified project cannot be used elsewhere in any other unit or in any other project. Similarly, the application for the project imports should clearly specify the particulars mentioned under clauses (a) to (d) of a sub-regulation (3) of the Regulation 5 and these particulars are required to be registered unit-wise and project-wise. The purpose of requiring all these details in advance is to ensure that there is one-to-one co-relation between the goods imported and the projects where they would be used and, therefore, it cannot be said that there is no requirement of one-to-one co-relation between the materials imported and the unit/projects where they are going to be used. It is an admitted position that the materials have been imported after the machinery have been already supplied to a project. If the machinery has already been supplied to a particular project, usage of the imported raw materials for the manufacture of machinery which is required to be supplied to a specific project cannot happen at all and, therefore, it is clear that the appellants have not complied with the terms and conditions of the Project Import Regulations. It is very clear the even before placing the order, the appellant have declared that the raw material is being imported for the initial assembly of capital goods required for the Project. The appellant have also made declaration that they shall be liable for any legal action and penalties as per the relevant Customs Tariff Act as amended form time to time in case of diversion of the goods imported under concessional duty or misuse of the imported material. The electrical steel sheets were diverted for the manufacture of other goods which were supplied to various customers, perhaps for some other Projects also. Under these circumstances, the action of the appellant is contrary to the declaration given to the authorities and it cannot be said that the appellant was not aware of the said provisions. Therefore, there can be no doubt that the imported goods are liable to confiscation, and the appellant is liable to pay redemption fine and penalty. Appellants have cleared goods/obtained Recommendatory letter based upon false declaration, knowing the implications. There is no interpretation of law involved. This is clear from the declaration given by them - appellant is not eligible for the benefit of Project Import Concession under CTH 9801 and consequently the imported goods are liable to confiscation with option to redeem the same on payment of fine and the appellant is liable to penalty - However, the fine is reduced from ₹ 1.25 crore to ₹ 1 crore and penalty is reduced from ₹ 50 lakhs to ₹ 10 lakhs - Decided partly in favour of assessee.
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