1997 (8) TMI 159 - AT - Customs

Summary

Issues:
1. Interpretation of Project Import Regulations, 1986 regarding endorsement on import license for project import.
2. Validity of the recommendation letter from DGTD for concessional assessment under project import.
3. Procedural requirements for availing benefits under Project Import Regulation.
4. Denial of benefit based on procedural grounds versus substantive fulfillment of project import requirements.

Analysis:
1. The case involves the interpretation of Project Import Regulations, 1986 concerning the endorsement on the import license for project import. The appellant imported industrial valves claiming project import benefits under Tariff Heading 98.01 with Notification No. 132/85-Cus. The dispute arose as the license lacked endorsement by DGTD or ITC authorities for project import purposes, leading to rejection by lower authorities.

2. The validity of the recommendation letter from DGTD for concessional assessment under project import was a crucial aspect. The appellant presented a letter from DGTD attesting to the import being essential for setting up a new project for M/s. Bhagwati Oxygen Ltd. The appellant argued that the deficiency in endorsement on the license was compensated by the DGTD recommendation, emphasizing the substantive fulfillment of project import requirements.

3. Procedural requirements for availing benefits under Project Import Regulation were contested. The Revenue insisted on specific endorsement on the license, citing Project Import Regulation 5(4) and ITC procedures. On the contrary, the appellant argued that the recommendation letter from DGTD adequately fulfilled the project import criteria, highlighting the importance of substantive compliance over procedural deficiencies.

4. The judgment addressed the conflict between denial of benefits based on procedural grounds versus the substantive fulfillment of project import requirements. The Tribunal held that the Revenue's insistence on a specific endorsement on the license was a procedural approach, emphasizing that the substantive fulfillment of importing goods for the initial setup of a new project was crucial. The Tribunal allowed the appeal, granting consequential relief to the appellant, emphasizing that substantive benefits should not be denied based solely on procedural deficiencies. The judgment highlighted the applicability of Section 28 of the Customs Act, 1962 for granting actual refunds in refund matters.