TMI Blog2022 (8) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... oner filed Notice of Motion No.149 of 2012 for return of bank guarantees. Even at that stage, respondents were silent and in fact respondents made statement to the court that they shall return the bank guarantees which had expired and they shall not invoke the remaining bank guarantees and within two weeks will return the same duly discharged upon expiry or the validity thereof, without insisting for renewal. Respondents could have told the court that the file has not been closed and these are the problems that petitioner has not fulfilled the requirements of Regulation 7 of the Project Import Regulations 1986 and, therefore, the question of returning any bank guarantee would not arise. Even when petitioner returned the bank guarantees or the remaining 4 bank guarantees, even at that stage, respondents do not raise the issue of the file being open. On 19th December 2012, respondent no.2 addressed a communication to petitioner, as noted earlier that out of the 65 bank guarantees that had expired, only 46 could be traced out and returned those 46 bank guarantees. As regards remaining 19 bank guarantees, respondent no.2 informed petitioner that original bank guarantees could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and heard. 3. Petitioner, a company incorporated under the relevant laws in France, is impugning an order dated 21st June 2013 passed by respondent no.2 directing de-registration of the contracts registered by petitioner and directing that the goods imported by petitioner be assessed on merit without the benefit of Project Import Regulations 1986 under the Heading 98.01 (erstwhile 84.06) of the Customs Tariff Act 1975 (the Tariff Act). 4. The Municipal Corporation of Greater Mumbai had introduced a project called Bombay Water Supply and Sewerage Project (the said project) that was to be administered under the funds released to India by the International Developmental Association and the World Bank. Government of India issued a Notification dated 2nd August 1976 under Notification No.269/76-CUS (the said notification) in terms of Heading No.84.66(1) of the First Schedule to the Tariff Act. As per the notification, any importation for the said project was entitled to the benefit of flat rate of customs duty of 40%. Petitioner, by an application dated 1st October 1984 applied to the Government of India to be issued a specific exemption order whereby equipments required to be bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g quashing of the second show cause notice issued. Petitioner also sought relief to forbear and desist respondent no.2 from in any manner enforcing the bonds and guarantees that petitioner had executed. Petition came to be disposed by an order dated 12th August 2008, by which Rule was made absolute and all the reliefs prayed for by petitioner were granted. As regards the bank guarantees that had been furnished by petitioner, the court directed that the bank guarantees would be kept alive for a further period of 24 weeks from the date of the order. From the said order, it was quiet clear that, a) the first show cause notice and the second show cause notice had been quashed and set aside, b) respondents have been restrained from enforcing the bonds and bank guarantees, c) respondents had not sought liberty to keep the issue regarding the purported post import obligations open and d) respondents were estopped from raising purported demands with respect to the same. 6. Respondents did not challenge this order and this order attained finality. As per the directions of the court, petitioner extended the validity of the bank guarantees until 27th January 2009. Notwithstanding the speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts to the remaining 4 bank guarantees, details of which are mentioned in paragraph 21 of the petition. Originals were not returned but only the amendments were returned despite repeated requests. In any event, the originals were also duly cancelled by the bank and in effect there were no bank guarantees in favour of respondents post December 2012. 10. In the meanwhile, in January 2013, petitioner received a demand notice dated 8th January 2013 from respondent no.2. Respondent No.2 informed petitioner that in terms of Project Import Regulations 1984 and the Custom House Public Notice No.8 dated 20th January 1976, the duty benefit of Project Import was subject to certain post importation conditions and petitioner was called upon to furnish the documents mentioned therein. The documents were as follows: i. Reconciliation statement; ii. Original Triplicate Bills of Entry and Bank/Customs attested invoice. Iii. Remittance Certificate issued by the Bank. iv. Evidence towards utilization of imported goods for the initial setting up or substantial expansion of the project; and v. Copies of Shipping Bills pertaining to re-export of imported under the contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: a) that the benefit of Project Import was subject to fulfillment of certain post importation conditions. The importers have to account for the goods imported by them and submit documentary evidence to prove that the imported goods have been used for setting up or substantial expansion of the same project which was registered with Customs. (b) that in this case petitioner has not submitted any reconciliation statement indicating the details of the goods imported with necessary documents as proof regarding the goods so imported by them and that it had been used in setting up of the project. (c) that petitioner has also not submitted any installation certificate or documentary evidence for completion or commissioning of the project. (d) that the importation requirement have to be complied with within three months from the date of clearance for home consumption of last consignment of the goods or within such extended period as the proper officer may allow in terms of Regulation 7 of the Project Import Regulations 1986. (e) that even though in the order dated 12th August 2008, this court has relied upon judgment of the Apex Court in Union of India Vs. Toyo E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18th October 1984, by which the Board had confirmed that the goods imported by petitioner were entitled to the benefit of concessional rate of duty under the said notification. The Board had also gone to the extent of stating that petitioner could avail the benefit of duty drawback under Section 74 of the Customs Act 1962 in respect of the duty, which they would have to pay on a concessional basis. We would not agree with respondent no.2 in its attempt to distinguish the judgment of Toyo Engineering (Supra) because that argument was never raised even before the High Court while the court heard and disposed the Writ Petition No.116 of 1988. Petitioner had extensively relied upon the judgment in Toyo Engineering (Supra). Paragraphs 10 and 15 of the judgment dated 12th August 2008 read as under: 10. Mr. Bharucha, the learned Senior Counsel for the petitioner has strongly relied on the judgment of the Hon ble Supreme Court in the case of Commissioner of Cusoms, Mumbai Vs. Toyo Engineering India Ltd (2006) 7 SCC 592, wherein in paragraph Nos.6, 7, 12 and 14 it is observed as under: 6. Heading 98.01 of the Tariff Act reads as under: 98.01 All items of machinery includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing up of a unit, or the substantial expansion of an existing unit . This heading specifically mentions and includes auxiliary equipment . The auxiliary equipment has not been defined under the Tariff Act. As per Dictionary meaning, extracted above, it is an equipment which aids or helps. Any equipment which aids or helps in the setting up of an industrial plant would fall and be covered under heading 98.01 of the Tariff Act. The mere possibility of its being used subsequently for other project would not debar the respondent from availing the facility of project import. If the contention of the Revenue is accepted, then resultant effect as put by the Tribunal would be: no equipment can be imported for projects like Konkan Railway Project, Road Development Projects of the National Highway Authority of India, etc. specified under Heading 98.01 of CTA. 14. We do not find any substance in this submission. In that case this Court did not consider the vehicles imported to be an item of auxiliary equipment required for setting up of an initial unit on the ground that it was used only in shifting of the transformers which would not constitute an integral part of the power project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d into the country on re-export basis are fully entitled to the benefit of concessional duty under Notification No.269/76. (Emphasis supplied) 16. If at all respondents had any issue of petitioner not strictly complying with Regulation 7 of the Project Import Regulations 1986, it is respondents case that petitioner should have submitted the details of goods imported together with necessary documents within three months from the date of clearance for home consumption of last consignment. The three months period appears to have expired sometime in 1984 and in any case before the Writ Petition No.116 of 1988 was filed. Respondents have not raised any such grievance before this court in that writ petition. Respondents had another opportunity to raise this grievance when petitioner filed Notice of Motion No.149 of 2012 for return of bank guarantees. Even at that stage, respondents were silent and in fact respondents made statement to the court that they shall return the bank guarantees which had expired and they shall not invoke the remaining bank guarantees and within two weeks will return the same duly discharged upon expiry or the validity thereof, without insisting for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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