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TMI Blog1991 (12) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... inlet ring heaters were found, whereas the packing list attached to Bill of Entry indicated only two numbers, and the Import Licence No. P/CG/2124527 also mentioned two numbers of the subject goods. Since goods were not covered by the import licence and the importer waived the issue of show cause notice, a personal hearing was granted by the Additional Collector. The authorised representative of the importer argued that each machine costs only US $ 3,170.25. Thus even if there are four units, the cost of all four units have been included in the value, and the appellant had claimed the benefit of para No. 45 of Import Policy 1988-91. It was also contended that the item imported was not restricted and benefit of project import was also claimed. The Addl. Collector in his order had observed that the import licence specifically described only two numbers of heaters and DGTD had also recommended two numbers of heaters for the initial setting of the project, and, therefore, the plea of the importer that the two extra heaters were also required for the project was not correct, and therefore, the two extra heaters will not be eligible for the project import benefit since two extra heaters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Heading 98.01, and benefit of project import, and the Bill of Entry is dated 8th June, 1990. Shri Srinivasan pleaded that under the project import two heaters were required to be imported, but the appellant has imported four (2+2). He pleaded that the import licence for two Nos. was applied in the beginning and during erection it was found that four heaters were needed. He drew the attention of the Bench to para No. 45 of the Import Policy 1988-91 which provided that 5% of the value of capital goods licence issued to a project could be utilised for any item of capital goods not already covered by it for expeditious completion of the project. He further stated that there is no excess import till this date. He stated that the value of two extra heaters is Rs. 1,14,000.00. Shri Srinivasan, learned Consultant, stated that the learned Additional Collector has rejected the appellant's prayers on the ground that only 42% of the project has been completed. He pleaded that erection of project cost by sections and for every section importation is made as and when needed. He relied on a decision of the Madras High Court in the case of Appraiser, Madras Customs v. Tamil Nadu Newsprint Papers r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 98.01. He also referred Section XXI of Chapter 98 - Project Imports, Baggage etc., which provides that Heading 98.01 is to be taken but applied to all goods which are imported in accordance with regulation made under Section 157 of the Customs Act, 1962 and expression used in this heading shall have the meaning assigned to them in the said regulation. Shri Srinivasan argued that the only condition is that the contract must be registered before the clearance of the goods and in the present matter the contract was duly registered before the clearance of the goods, and once the goods are covered by the licence, it should be deemed that the goods are covered by the licence. Shri Srinivasan pleaded that the importation by the appellant is in accordance with law, and there was no justification for the levy of redemption fine of Rs. one lakh and imposition of penalty of Rs. 10,000/-. 5. Shri M.K. Sohal, learned JDR, has appeared on behalf of the respondent. He pleaded that the appellant had declared two dryer slurry inlet ring heaters in the Bill of Entry and the bill of entries were duly signed by the importer as well as clearing agent, and the bill of entry goes to docks after examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to para No. 45 of the Import & Export Policy April 1988-March 1991 Volume I at page 14. The said para is reproduced below :- "Import of Capital Goods under flexibility 45. Capital goods licence issued to a project will be valid for the import of any item of capital goods not already covered by it, provided the item is needed for the expeditious completion of the project, and its value does not exceed 5 per cent of the value of the licence, subject to a maximum of Rs. 25 lakhs within the overall value of the licence. Under this facility, import of restricted items of capital goods will not be permitted." The Additional Collector has observed that only 42 per cent of the items required for the project has been cleared. The appellant has relied on the letter dated 18th July, 1990, written by Lummus Crest B.V. where it has been mentioned that the total cost for slurry inlet ring heater each is USD 3,170.25 FOB value and the total cost of all four CIF is USD 12,937.98. In the bill of entry also the cost has been mentioned is USD 12,937.98. 8. We have perused the agreement between Reliance Petrochemicals Limited and LUMMUS CREST B.V. which appears as annexure 'A' and the arti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Legal Section, Custom House, in the writ petitions. They are as follows :- "There have been complaints that the import of equipment by project is impleaded as a result of meticulous assessment at the appropriate rates of each constituent item required for setting up the project. I now propose to introduce a new tariff item to cover the import of equipment needed for the initial setting up of new projects or for undetaking substantial expansion of existing projects in the fields of industry, power, mining and prospecting for minerals or oil. Not only complete consignment but also component parts and raw materials imported specifically for fabricating equipment within India, for a project and same quantity of initial stock of spare parts and other stores needed for the maintenance of the project can be imported under this item. The contract or contracts would have to be registered in advance with the Customs authorities and a provisional assessment will be made immediately obviating to the maximum possible extent the need for detailed assessment of individual lots, after the goods arrive. The equipment is imported under the item will be charged to duty at the machinery rate........" ..... X X X X Extracts X X X X X X X X Extracts X X X X
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