TMI Blog2022 (12) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... present case the facts are not under dispute that the goods under the project import have been warehoused under into bond bill of entry thereafter before clearance of the goods from the warehouse under ex-bond bills of entry the project has been registered. In the instant case it is not in dispute that all the contracts and purchase orders in question were registered by the appellant before an order of clearance of home consumption was passed in all 63 bills of entry. Therefore, there are no contravention of Regulation 4 and/or 5 of the PIR, 1986 - Therefore, merely because the project was registered prior to clearance of goods for home consumption from warehouse there is no contravention on the part of the appellant and they are legally entitled for the exemption available to the project import. Change of classification to chapter 98.01 - HELD THAT:- There was no charge in the SCN regarding change of classification. Therefore, entire proceeding on the issue which is not flowing from the SCN is vitiated. It is settled law that an adjudicating authority cannot go beyond the scope of SCN. In view there of this finding of lower authority and the consequent conclusion drawn the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner (Appeals) succeeds there is no substance in the Revenue s appeal and the same is not maintainable. The impugned orders are not sustainable and hence the same are set aside - Appeal allowed. - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri Vishal Agarwal, Shri Akshit Malhotra Ms. Dimple Gohil, Advocates appeared for the Appellant Shri Deepak Kumar, Special Counsel (AR) for the Respondent ORDER The brief facts of the case are that the appellant has set up a 1200 Megawatt Thermal Power Plant at Salaya in the state of Gujarat, which was granted the status of Mega Power Project by the Ministry of Power, Government of India vide their letter F.No. C- 8/2007-IPC dated 08.02.2010. For setting up this project the appellant had entered into a contract dated 24.08.2007 with M/s Global Supplies FZE and also placed separate purchase orders dated 16.04.2008, 21.11.2009 and 26.05.2008 on M/s. Shinkawa, Japan, Arewa T D M/s. IDC Technologies, Israel for import of capital goods. Since these capital goods were required for setting up the project were eligible for exemption from payment of custom duty, if the contracts/purchase orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rase on or before in regulation 5 ought to be read as on or before clearance for home consumption . In the instant case it is not in dispute that all the contracts and purchase order in question were registered by the appellant before an order of clearance for home consumption was passed in all 63 bills of entry. Consequently there is no contravention of Regulation 4 or 5 of the PIR, 1986. He referred to CEEC customs manual of instruction para 3.1 and 3.2 of Chapter 5. According to which benefit of PIR, 1986 is available as long as the contract is registered prior to an order for clearance of goods for home consumption is made by the proper officer. He submits that the issue in dispute is no longer res- integra and stands settled in appellants favour by order of this Tribunal in the case of Essar Projects India Ltd vs. Commissioner of Customs port, Kolkata reported in 2015(329) ELT 130 (Tri. Kol). A similar finding was arrived at by the Hon ble Tribunal in the case of National Aluminium Company vs. CC reported in 2019 (366) ELT 354 (Tri. Kol.).He also relied upon the following Judgments:- Bharat Earth Mover Limited vs.CC- 2006 (201) ELT 60 Eveready Industries India Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the ground that the goods were classified under respective tariff heading at the time of filing the warehousing bills of entry therefore, the finding being beyond the scope of SCN is completely unsustainable. 2.5 Without prejudice to the above, he submits that the decisions relied upon by the respondent are distinguishable in the facts and circumstances of the present dispute. The respondent has failed to appreciate the facts that both the said cases pertain to one particular item whose classification as assessed on warehousing bill of entry was sought to be altered at the time of clearance of said item for home consumption. The same was not allowed on the logic that once the characteristics and nature of the goods have been examined and classification determined thereof at the time of warehousing, it was not open to dispute the characteristics and nature of the goods at the time of clearance of the same for home consumption. However, in the present case the appellant is not disputing the nature and characteristics of the goods and the classification was determined in into bond bills of entry . He submits that in the present case while the appellant does not dispute that at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that goods are not liable for confiscation under section 111 (o) in as much as there is no violation of post import condition. Even there is no allegation in the SCN regarding any violation of post import condition therefore, the goods are not liable for confiscation and imposition of penalty is unsustainable. 2.9 Without prejudice, he submits that the redemption fine is imposable only when the goods are available for confiscation. In the present case neither the goods were available nor the same was released provisionally on provisional release bond. Therefore, the redemption fine is not imposable. He placed reliance on the following judgment : Finesse Creations 2009 (248) ELT 122 (Bom.) maintained in 2010 (255) ELT A120 (SC). 2.10 In light of the above submission, he prays that appeals may be allowed and the impugned orders be set aside. 3. Shri Deepak Kumar, Learned Special Counsel appearing on behalf of the Respondent reiterates the finding of the impugned order. As regard the Revenue s appeal he reiterates the grounds of the appeal. He also placed reliance on the following judgments: Dunlop India Ltd - 1997 (95) ELT 162 (SC) Mihir Textiles Ltd 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ences duly sponsored or approved by the Government of India or Trade Fair Authority of India, as the case may be, before the date of payment of duty. REGULATION 5. Registration of Contracts. - (1) Every importer claiming assessment of the goods falling under the said heading No. 98.01, on or before their importation shall apply in writing to the proper officer at the port where the goods are to be imported or where the duty is to be paid for registration of the contract or contracts, as the case may be: Provided that in the case of consignments sought to be cleared through a Custom House other than the Custom House at which the contract is registered, the importer shall produce from the Customs House of registration such information as the proper officer may require. (2) The importer shall apply , as soon as may be, after he has obtained the Import trade control licence wherever required for the import of articles covered by the contract and in case of imports covered by the Open General Licence or imports made by Central Government, any State Government, statutory corporation, public body or Government undertaking run as a joint stock company (hereinafter referr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Project Import Regulations, 1986 (PIR) the basic requirement for availing the benefit of assessment under Tariff Heading 98.01 is that the importer should have entered into one or more contracts with the suppliers of the goods for setting up a project. Such contracts should be registered prior to clearance in the Customs House through which the goods are expected to be imported. The imported shall apply for such registration in writing to the proper officer of Customs. 3.2 Regulation 5 provides in the manner of registering the contracts, as follows:- (i) Before any Order is made by the proper officer of Customs permitting the clearance of the goods for home consumption; (ii) In the case of goods cleared for home consumption without payment of duty subject to re-export in respect of fares, exhibitions, demonstrations, seminars, congresses and conferences, duly sponsored or approved by the Government of India or Trade fair Authority of India, as the case may be, before the date of payment of duty. From the plain reading of the above para of CBEC s Custom Manual of Instruction also makes it very clear that the contract should be registered before any o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant. Also the appellant was registered for benefit under project import benefit initially, after the lapse of seven and a half years, the Department can t take the stand contrary to that at the time of finalization, denying the concessional rate of duty under project import.Therefore, we set aside the impugned order and allow the appeal. In the aforesaid judgment the goods were imported but even after import the appellant did not have the certificate from the project sponsoring authority and only after obtaining the said certificate the customs has permitted the clearance of the goods under PIR, 1986. A similar view was taken by this Tribunal in the case of Eveready Industries India Ltd (Supra). 5 . We find that the issue in this appeal is regarding demand of customs duty on the ground that the appellant had irregularly taken duty concession under Project Import Regulations, 1986 (PIR) inasmuch as they have not complied with sub-clause (i) of Regulation 5 of the PIR as the contracts have been registered by the proper officer at the port after importation of the goods and warehouse. 6 . We also find that as per Rule 5(2) of the PIR, any import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd hence they are eligible for the benefit of the project import. In the case of Bharat Earth Movers Ltd (Supra) identical issue has been decided:- 4 . On a careful consideration and perusal of the provisions of Chapter 98 of Customs Tariff Act read with Regulation 4 5 of the Project Import Regulations, it is cleared that the project can be registered before the goods are cleared for the home consumption. In the case of Mihir Textile Ltd., the Apex Court had examined the provisions as under chapter heading 84.66 which clearly laid down that the registration of contract has to be done before clearance of goods for home consumption or before the deposit in the warehouse. This restriction is absent in Regulation 4 5 of the present Regulations and in Chapter Heading 98.01. The Regulation 4 specifically omits a reference to the condition regarding registration being done before depositing in a warehouse and only states that it has to be done before clearance for home consumption. Therefore, both the authorities have not carefully gone through the provisions and had denied the benefit on incorrect reading of the provisions. The appellants had registered the contract b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Heading 9801 is to be taken to apply to all goods which are imported in accordance with the Regulation made under Section 157 of the Customs Act, 1962 (52 of 1962) and expressions used in this heading shall have the meaning assigned to them in the said Regulations. As per the above chapter note it is clear that all the goods which otherwise may be classifiable in its actual tariff heading but once the goods is cleared under PIR , 1986 all the goods shall be classified under 9801. There is a force in the submission of he learned counsel, as regard the information gathered under RTI that at various customs ports even though the into bond bills f entry were filed under tariff item of individual goods but in ex-bond bill of entry the project import has been classified under CTH 9801 and benefit was allowed without raising any objection. We are of the view that at the time of clearance of the goods either from the port for home consumption or either from the warehouse under ex-bond bills of entry the correct custom tariff head has to be applied. For example, if by mistake wrong classification was made in the into bond bill of entry, the same cannot be allowed to be continued whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so not in dispute that the company had not paid any duty as the goods were warehoused. The very idea of warehousing the consignment is to defer payment of the duty till actual clearance for home consumption. Admittedly, the company had not paid the duty and it had resorted to warehousing of the consignments and for the purpose of ascertaining the amount of duty and also to secure the same by the execution of bonds, the assessment had been made and not for any other purpose. In view of this, the claim of the company that even at the time when the Bills of Entry for warehousing had been filed, an assessment had been made and that cannot be gone back upon, cannot be accepted. When, even according to the company, the goods had been entered for warehousing, the proper provision applicable would only be Sec. 15(1)(b) of the Act read with S. 68 thereof and not Sec. 15(1)(a). The learned judge, while accepting that Bills of Entry for deposit in the bonded warehouse were filed on 15-6-1981, fell into an error in holding that the goods had been entered for home consumption on arrival by presenting the Bills of Entry and therefore, the duty as leviable on that date alone, was payable. When it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... All documents , as are required to be attached with a Bill of Entry for home consumption are also required with the Bill of Entry for warehousing which is assessed in the same manner and duty payable is determined. However, since duty is not required to be paid at the time of warehousing, the purpose of assessing the duty at the this stage is only to secure the duty in case the goods do not reach the warehouse. The duty is paid at the time of ex-bond clearance of goods for which an Ex-Bond Bill of Entry is filed. The rate of duty applicable to imported goods cleared from a warehouse is the rate in force on the date of filing of Ex-Bond Bill of Entry. From the above para it is clear that the assessment in real sense takes place at the time of ex-bonding of the warehouse goods. Therefore, the effect of rate of duty, any exemption notification prevailing at the time of filing the ex-bond bill of entry shall be applicable and not the one which is applicable at the of in-bonding of the good even though the different rate of duty was applied in the in-bond bill of entry. 4.4 In view of above settled position the Revenue has no authority to question the change of classification at ..... 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