TMI Blog1983 (3) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... counts- (i) Delay in registration of the contract on the part of the appellants, (ii) Failure on the part of the appellants to produce the endorsement of the licensing authority on the import licence, or a Recommendatory Letter, to the effect that the goods to be imported under the said licence were entitled to the benefit of Project Imports, (iii) Suppression by the appellants of the fact that the imports in question were not for initial setting up of a unit or for substantial expansion of an existing unit but were for modernisation and replacement only, and (iv) Ineligibility of the appellants to the benefit of heading 84.66 since this heading was confined to Project Imports for initial setting up of a unit or substantial expansion of an existing unit while it was ultimately found that the imports in question were not for this purpose but were for modernisation and replacement of the appellants existing cement plant. As regards delay in registration, Regulation 3(2) of the Project Imports (Registration of Contract) Regulations, 1965 requires that an importer intending to avail of the benefit of assessment under heading 84.66 should apply for registration of his co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in which the appellants declared that the components to be imported were to be used for initial setting up of the plant. The appellants were asked to state what they meant by this declaration which was apparently contradictory to their stand that the imports were for modernisation of their existing cement plant. The appellants explained that what they meant was that the components imported would first be used for setting up the replacement plant and the said plant was later to produce cement. In any case, they added, the Collector had, at no stage, said that he was misled by their aforesaid declaration at item (g). They stated before us categorically that their imports in question were not for the purpose of initial setting up of a unit or for substantial expansion of an existing unit but only for the purpose of modernisation and replacement of their existing cement plant. (4) Having passed final orders registering their contract for the benefit of heading 84.66, the Collector was not entitled to have second thoughts and de-register their contract. No doubt, the Collector had, while according registration, ordered simultaneously that the goods imported by the appellants shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. They left the relevant column of the application, which was very material and vital with reference to Regulation 3(3) (c), blank. On the other hand, they put pressure on the authorities on the ground of approaching monsoons to have registration of their contract done on immediate basis lest the machinery be damaged by rains. In such a situation, it was well nigh impossible for the authorities to make a detailed scrutiny of the voluminous contract and of the industrial licence etc. and to gain the knowledge through such indirect method that the contract was for modernisation and replacement only and not for expansion of capacity. (4) Though the Collector had registered the contract and assigned it a number, the registration process was not complete till the continuity bond required to be executed by the appellants was accepted by the Collector. This had been made clear in the Collector s Public Notice No. 20/1981 dated 4-11-1981 relating to project imports. In this case, though the appellants prepared the bond and sent it to the Collector, it was not accepted by the Collector. The process of registration was, therefore, not complete or final. (5) There was no estoppel in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting registration after considering their explanation for delay, had, impliedly, accepted their explanation and it was, therefore, not fair on his part to make the question of delay a ground for proceeding against the appellants later. We also agree with the appellants that their failure to produce the Project Import endorsement on their import licence or a Recommendatory Letter to that effect was not a bar to their availing of the benefit of heading 84.66 if otherwise due to them. As regards the Collector s charge of suppression of facts on the part of the appellants, we find force in their grievance on this count too. No such allegation was contained in the show cause notice issued by the Collector and, consequently, the appellants were not heard on this count. Collector s order holding the appellants guilty of suppression of facts was, therefore, a unilateral one and this part of his order has to be struck down on that ground alone. Even on merit, we find no substance in the charge that the appellants were guilty of suppression of facts. No doubt, they made no clear declaration in the body of their application for registration that their imports in question were for modernisati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that the Collector had ordered a provisional assessment. Provisional assessments are governed by Section 18. The only relevant portion of the section which could apply to the facts of the present case is clause (c) of sub-section (1) of the section, namely, that the appellants had submitted the documents which they could but the Collector required further information before making a final assessment. This is borne out by the Collector s action in writing letters to the Chief Controller of Imports Exports as well as to the appellants in order to make sure whether the imports in question were for initial setting up of a unit or for substantial expansion of an existing unit or not. It was only in their letter dated 27-9-1982 that the appellants stated in clear terms that their imports were only for modernisation and replacement. This was immediately followed by the Collector s show cause notice which culminated in the order impugned in these proceedings. We see nothing wrong in the Collector s action since under the law, in terms of Section 18 as well as Section 28, he was entitled to do so if he felt that the facts of the case did not make the imports in question eligible to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision to the contrary. The industry does require maintenance parts and machines to carry on production. The import policy makes provision for granting such licences or places some of these imports under an Open General Licence. The question of rate of duty applicable to imports is determined by Customs when the goods actually arrive. If, at this stage, an importer of machinery, instruments etc., were to claim assessment under heading 84.66 just by having his contract registered under the Regulations, regardless of the purpose of his import and regardless also of the fact that his particular purpose may have nothing to do with the six industries and projects specified in that heading, the scheme of the Tariff would certainly be distorted. 7. Interpreting heading 84.66, the way the appellants want us to do, will also create practical problems of implementation. Large size machines or complete plants can seldom be imported in one piece. They are unassembled and are imported in the form of components to be reassembled later. Because of the need to encourage indigenous industry and to conserve foreign exchange, the sponsoring authorities in the Government entrusted with regulat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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