Customs, Excise and Gold Tribunal - Delhi
Uma Arts Studio vs Collector Of Customs on 30 December, 1987
Equivalent citations: 1989(40)ELT115(TRI-DEL)
ORDER Harish Chander, Member (J)
1. M/s. Uma Arts Studio, Puliyarakonam, P.O. Vilappilsala, Trivandrum had filed a revision application to the Additional Secretary, Ministry of Finance, Department of Revenue, New Delhi being aggrieved from Order-in-appeal No. C27AP/85/81, dated 11-1- 1982/31-5- 1982 passed by the Appellate Collector of Customs, Madras. The said revision application stands transferred to the Tribunal in terms of the provisions of Section 131B of the Customs Act, 1962 to be disposed of as an appeal.
2. Briefly the facts of the case are that M/s. Uma Arts Studio had imported one Arriflex-35 IIC BV Camera with accessories under B/F No. 105/7-7-80 and Sound tapes Nagra complete accessories for sound tapes under B/C No. 400/28-10-80 through Cochin Port against Import Licence No. 2034782, dated 14-2- 1980 issued by the Joint Chief Controller of Imports and Exports, Madras endorsed as 'Project Import for assessment under heading 84.60 of Section XVI of CTA' and claimed the registration of the contract and assessment under heading 84.66 of the Customs Tariff. The appellants stated that the goods were meant for the substantial expansion of the project and were eligible for concessional assessment violable for an industrial plant. Industrial registration No. RIP(T)/4261/74, dated 28-2- 1974 issued by the Deputy Director of Industries and Commerce, Project Region, Trivandrum was also produced by them to substantiate that the studio is registered as a small scale industrial unit. It was contended by the appellants that the subject goods were required for improving the production of feature films and documentaries. The goods were released to the appellants pending verification of the facts of the case and the elegibility of the studio to classify it as an industrial plant for considering assessment of the goods under heading 84.66 I.C.T. on execution of the provisional duty bond Nos. 96/80 and 170/80 with Bank Guarantee by the appellants. The appellants contended before the Assistant Collector that since there was an endorsement made by the licensing authority allowing import of the goods against project assessment the Customs Authorities have no jurisdiction to go beyond that. The learned Assistant Collector had taken the view that it was in the nature of a recommendation. He has held that Uma Arts Studio was not an industrial plant and was not eligible for assessment under heading 84.66 and had further ordered that the goods should be assessed under proper headings. Being aggrieved from the aforesaid order the appellants had filed an appeal to the learned Appellate Collector of Customs, Madras. The learned Appellate Collector had taken the view that no manufacturing process was involved and only shooting of the film and recording was done which could not be termed as manufacture. She had further observed that 'Project Import' endorsement on the Import Licence was also not acceptable and it was for the revenue authorities to see whether the imported goods can be treated as Industrial Plant or not. She had held that the appellants were not entitled to the benefit of project import and had rejected the appeal. Being aggrieved from the aforesaid order the appellants have come in appeal before the Tribunal.
3. Shri K.P. Dandapani, the learned advocate has appeared on behalf of the appellants. He has reiterated the facts and the contentions made before the lower authorities. He has pleaded that the appellant is an industrial undertaking and the Studio is duly registered as in Industry with the State Industry Department. In support of his arguments he has referred to a judgment of the Supreme Court in the case of The Gujarat State Financial Corporation v. Lotus Hotels Pvt. Ltd. where it was held that principle of promissory estoppel would stop Corporation from backing out of its obligation. Shri Dandapani has argued that since there was an endorsement by the ITC authorities and as such the Customs authorities should have allowed the benefit of the Project Import under heading 84.66 to CTA, 1975. He has further argued that since the appellant concern is an industrial unit as such the appellant is entitled to the benefit of Project Import under Heading 84.66. He has argued that in case the appellants plea for the benefit of project import is not accepted in the alternative the same may be assessed under Heading 90.07. Shri Dandapani, the learned advocate has pleaded for the acceptance of the appeal.
4. Shri D.K. Saha, the learned J.D.R. who has appeared on behalf of the respondent has argued that before getting the benefit of Project Import under heading 84.66 the appellants has to satisfy two conditions namely (1) the unit should be registered as factory under the Factories Act and (2) it has to be registered as an Industry under the Industries Act. In support of his arguments he has referred to the following judgments:-
(i) 1984 (17) ELT 443 (Tribunal) (Photovisual, Calcutta v. C.C., Calcutta).
(ii) 1983 ELT 829 - Swarastra Cement and Chemical Industries.
(iii) Writ Petition No. 8398 of 1984 - Das Colour Lab, Madras.
(iv) Order No. 232/85-B2, dated 11-12- 1985.
(v) Order No. 1070-1071/86-B2, dated 20-10- 1986.
(vi) Order No. 805 & 806/87-B2, dated 23rd March, 1987.
Shri Saha has argued that the purchase of camera cannot lead to the inference that there was substantial expansion. He has pleaded for the dismissal of the appeal.
5. In reply Shri Dandapani, the learned advocate has pleaded for the acceptance of the appeal.
6. We have heard both the sides and have gone through the facts and circumstances of the case. The learned advocate he placed reliance on the Hon'ble Supreme Court's judgment in the case of Gujarat State Financial Corporation v. Lotus Hotels Pvt. Ltd. and had argued that endorsement by the ITC authorities for the benefit of project import under Heading 84.66 of Customs Tariff Act, 1975 is sufficient enough for the grant of the benefit of the project import under Heading 84.66. The principle of promissory estoppel is not applicable in this case. The Customs authorities can come to an independent conclusion. The endorsement of the ITC authorities is not binding on them. The licences issued by the ITC authorities are to be seen only to the extent whether the importation is in accordance with the import policy or not. It is a settled law that the assessment has to be made by the customs authorities under the Customs Tariff Act in force at the time of importation. In the case of Photovisual, Calcutta reported in 1984 (17) ELT 443 (Tribunal) the Tribunal had held that "the question whether a particular imported machinery would attract duty or not has to be decided by the Customs authorities. The letter granted by the Ministry of Industries recommending a concessional customs duty would be in furtherance of the recognition of the appellant's establishment as a small scale industrial unit but would not help them in proceedings under the Customs Tariff Act". The judgments cited by the learned advocate do not help him. Hon'ble Madras High Court in the case of The Das Lab v. Collector of Customs, Madras in Writ Petition No. 8398/1984 had held that before the benefit of Project Import under Heading 84.66 could be extended the appellant has to satisfy the following two conditions:-
(1) that the importer is a Unit registered either with the DGTD or with the State Director of Industries; and (2) that the said Unit qualifies as a factory within the meaning of the Factories Act.
The appellant's unit does not satisfy the second condition i.e. it does not qualify to be a factory under the Factories Act and as such we hold that the appellant is not entitled to the benefit of Project Import under Heading 84.66 of the Customs Tariff Act, 1975. Shri Dandapani, the learned advocate had pleaded that the assessment should be made under Heading 90.07 whereas the impugned order shows that the appellant had made a claim under Heading 90.08 before the learned Appellate Collector of Customs and he had rejected the claim on the ground that this plea was not taken earlier before the Assistant Collector. This claim for assessment under this heading had never been placed before the Assistant Collector, the original authority. If the importers wish this head to be considered, they may place it before him for consideration, as such an assessment must be first considered by the first authority i.e. the Assistant Collector.