TMI Blog2005 (9) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... f the imported goods. In other words, the applicability of the concessional project import rate for the replacement imports in the facts and circumstances of this case. There is another question to be decided whether the demand of duty on the addition of value to the extent of US $ 489000 on account of the optional 3 SAC combustors which were not imported by the appellant is sustainable. 3.The appellants M/s. BSES Kerala Power Ltd., Udyogamandal had an agreement with Kerala State Electricity Board for initial setting up and generation of a power plant at Udyogamandal, Kerala. They completed all the formalities under the Project Imports Regulations with the Customs. As a part of the regulations, they had to register their contract in the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al assessment for the replacement, it has been held by the Commissioner (Appeals) that the replacement is not a free replacement by the supplier. The replacement items have been purchased from another supplier and they cannot form part of the original contract. It was submitted that the subject goods got damaged due to entry of contaminated water into the turbine due to a tidal reversal in the Periyar River. Hence the damage is not on account of any design deficiency or material defect of the material supplied by the foreign supplier. As per the performance guarantee, the supplier would replace only on account of design deficiency or materials defects. Since in the present case, the damage is not on account of the design deficiency the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efit cannot be denied. (iv) The following decisions were relied on M/s. Shabnam Synthetics Limited v. CCE, Surat [2003 (152) E.L.T. 123 (Tri.-Mumbai)], M/s. Ginni International Limited v. CCE, Jaipur [2002 (139) E.L.T. 172 (Tri. -Delhi)], CCE, Indore v. M/s. Dhar Cements Limited [2000 (121) E.L.T. 720 (Tri.-Delhi) and M/s. R.A. Cement Pvt. Ltd. v. CCE, Allahabad [2003 (161) E.L.T. 964 (T.) = 1999 (34) RLT 623 (Tri.-Delhi)]. (v) Revenue has made no attempt to approach the concerned sponsoring authority to ascertain the entitlement of the eligibility of the impugned goods but simply denied the benefit which is against the law. (vi) The Commissioner's (Appeals) observation that project import benefit can be extended o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of the project value. It was submitted that there is no provision under the Project Import Regulations, which contemplates such enhancements. Even the relevant Rule 6, which speaks of amendment to contract, does not explicitly provide for such enhancement. (x) With regard to Commissioners observation that there was no element of High Sea Sales Commission in the impugned replacement transaction as compared to the earlier contract. It was submitted that the import of gas turbines was on High Sea basis, in which there was an element of High Sea Sale Commission for the earlier transaction. But in the present replacement transaction, there is no High Sea Sale and hence there cannot be any High Sea Sale Commission. But the absence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SDR reiterated the contentions in the Order-in-Original and Order-in-Appeal. He requested the Bench to uphold the impugned order. 7.We have gone through the records of the case carefully. The first question to be decided is whether the appellants are entitled to the project import concessional assessment in respect of the replacement goods imported by them. No doubt, the appellants had registered the contract with the Custom House in terms of Regulation 4 of the Project Imports Regulations, 1986. Once a contract is registered, the items imported under that contract are entitled for the project import benefit. The procedure for registration of contracts is given in Regulation 5. The lower authorities have denied the benefit to the replace ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case, it is not the case of the Revenue that the contract has not been registered. In fact, the contract covering all the imports has been registered. All the formalities under the Project Imports Regulation have been fulfilled. It was noticed that the 3 rotor hot section assemblies got damaged. The question raised by the Revenue is that the original supplier of the equipments should have replaced the items free of cost. The appellants in their submissions have given certain reasons for not getting free replacements from the original supplier. They placed an order with M/s. G.E., USA for the supply of the replacements on payment of their appropriate price. The price was also in terms of the contract. The above purchase order contra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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