Custom, Excise & Service Tax Tribunal
Pcs Technology Ltd vs Commissioner Of Customs (I), Mumbai on 8 December, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. C/522/06-Mum (Arising out of Order-in-Appeal No. 44/2006/MCH/DC/Contract Cell/05 dated 30.1.2006 passed by Commissioner of Customs (Appeals), Mumbai) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) and Honble Mr. C.J. Mathew, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== PCS Technology Ltd. Appellant Vs. Commissioner of Customs (I), Mumbai Respondent Appearance: Shri M.H. Patil, Advocate, for appellant Shri M.K. Sarangi, Joint Commissioner (AR), for respondent CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) Date of Hearing: 15.11.2016 Date of Decision: 8.12.2016 ORDER NO Per: M.V. Ravindran
This appeal is directed against order-in-appeal dated 31.01.2006, by which the Commissioner (Appeals) has upheld the order-in-original dated 17.10.2005 denying classification of certain machines and equipment imported by the appellants during the initial setting up of their factory at Noida for manufacture/assembly of computer systems, under Heading 9801, as project import, and deregistering the same from project import and ordering assessment on merits.
2. The facts, necessary for disposal of the present appeal, are that the appellants, for manufacture of computer systems and peripherals at the time of initial setting up of their factory at Noida, imported certain machineries and equipment under Project Import Regulations, 1986 (PIR, for short) and, accordingly, the contract was registered with the Customs House before import. During the months of December, 1989 and January, 1990, the appellants imported consignments of the machineries for which nine Bills of Entry were filed which were assessed to provisionally. The appellants had also executed a bond for the said purpose. The said machineries imported were put to use for the intended purposes in their factory at Noida from 1989-90 till 11.05.1996 and the same were shifted to their factory at Silvassa, on closure of their Noida factory.
3. Show Cause Notice dated 31.10.1997 was forwarded to appellants, vide Deputy Commissioners letter dated 14.09.2005. By order-in-original dated 17.10.2005, ordered de-registration of contract and assessment of goods on merits without the benefit of PIR under Customs Tariff Heading 9801. He also ordered enforcement of provisional duty bond and encashment of Bank Guarantee. In appeal, the appellants submitted inter-alia reconciliation statement, along with supporting documents, Bills of Entry-wise and also submitted an Affidavit dated 14.12.2005 sworn in by Mr. D.B. Maheshwari, who was the Manager of the appellants then, testifying that the imported machineries were installed in the factory at Noida and were used for the manufacture of computers. The Commissioner (Appeals), by impugned Order, has upheld the order-in-original and, hence, this appeal.
4. The Advocate appearing for the appellants would submit that machineries imported under the disputed nine Bills of Entry were installed in their Noida factory and used for manufacture of computer systems and peripherals; that they also submitted reconciliation statement along with supporting documents Bill of Entry-wise, over and above submission of an Affidavit of their Manager testifying installation and use of the said machinery; that against the order of the Tribunal dated 08.06.2006 directing them to deposit Rs.15 lakhs, they had approached the Honble High Court, which gave time for substantiation of installation of the machinery. By an Affidavit filed before Honble High Court in October, 2006, the appellants had submitted verification report of the UP Sales Tax Authority of the machines in use including the disputed machines. Further, their application for load sanctioning of electricity was allowed on due verification of the machinery installed in their Noida factory, which include the disputed machines. The Honble High Court directed the Tribunal to decide on merits giving liberty to the Appellants to produce documents to prove installation of the machinery. The Appellants have produced a certificate dated 20.12.90 issued by M/s. Arche Associates, certifying that they had inspected the machines installed which were imported under PIR. In any case, the requirement of submission of installation certificate and reconciliation certificate came on statute book only w.e.f. 07.01.1992 by insertion of Regulation 7 in PIR, 1996, vide Notn.No.17/92-Cus dated 07.01.1992. Therefore, the same cannot be made applicable retrospectively for the imports made under PIR during the year 1989-90. In support, the Advocate relied upon various judgments.
5. Shri M.K. Sarangi, Joint Commissioner (A.R), argued taking recourse to the reasoning from the orders of lower authorities and claimed that it is mandatory to produce not only installation certificate, but also reconciliation statement for the goods imported under PIR, although Regulation 7 was inserted from 07.01.1992; that there were some internal instructions to that effect; that the said documents were not submitted before the Original Authority. He also requested for remanding the matter.
6. Heard both sides and perused the records
7. The issue for consideration is whether the appellants are eligible for the benefit to reduced customs duty under PIR, 1986, for the machines and equipment imported under the nine Bills of Entry, during the period 1989-90. The requirement of submission of statement, indicating details of the goods imported together with other necessary documents, within three months from the date of clearance for home consumption of the last consignment of the goods or within extended period, was inserted and brought on statute book for the first time through amending Notn. No.17/92-Cus dated 07.01.1992 by insertion of Regulation 7 in PIR, 1986. Even the show cause notice, in para 2, alleges that clause 7 of PIR now requires to submit reconciliation statement within three months from the date of import, when clause 7 was not in vogue when imports were made. The Tribunal in the case of Kores India Ltd. vs. Commissioner of Customs, Mumbai, reported in 2016-TIOL-664-CESTAT-MUM has held that when the regulation was not in the statute when the goods were imported, such new regulation cannot be pressed in the service for denying the benefit of PIR. This judgment squarely applies to the case on hand. We, therefore, hold that Regulation 7 of PIR inserted w.e.f. 07.01.1992 would have prospective effect and cannot be made applicable for the imports made during the period prior thereto. We find that, in the instant case, imports were made in December, 1989 and January, 1990 and SCN dated 31.10.97 was forwarded to the Appellants by Deputy Commissioner of Customs, vide his letter dated 14.09.2005. Tribunal in the case of Creative Industries P.Ltd. vs C.C.& C.EX (A-II), Hyderabad, reported in 2008 (228) ELT 379 (Tri.Bang) has held that when no evidence by the Revenue was brought to show that equipments imported under PIR has not been installed, belated denial of benefit under PIR is not permissible. The said judgment would also apply to the case on hand.
8. Further, we also find that the Appellants have submitted reconciliation statement along with supporting documents for each of the nine Bills of Entry before the Commissioner (Appeals). The Affidavit of the Manager of the Appellants also testifies that the imported machineries were installed in their factory at Noida and were used for the manufacture of computers till the factory was shifted to Silvassa in May, 1996. Survey Report dated 27.07.90 of the UP Sales Tax Authorities substantiate installation of various machineries including the imported machineries under PIR. Additional load sanction was permitted by the UP Government Electrical Safety Department after verification of the machines in operation, which includes the machineries imported under PIR. The Appellants also have submitted the statements linking Bills of Entry-wise capital goods imported and corresponding entries in Sales Tax survey and application for load sanctioning of electricity. The appellants also have produced Chartered Engineers certificate dated 20.12.90 certifying therein the inspection of the machinery installed in appellants Noida factory, which includes the machinery imported under PIR. With the above evidence on record substantiating the installation and use of the machines imported under PIR, we are satisfied that the Appellants are eligible for benefits of project import and are not inclined to accept the plea of the Dept. to remand the matter pertaining to the period 1989-90 at this stage. Accordingly, we allow the appeal with consequential relief, if any, in accordance with law.
(Pronounced in Court on 8.12.2016) (C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial) tvu 1 7 C/522/06