LexCOMMISSIONER OF CUSTOMS, MUMBAI versus MIS. TOYO ENGINEERING INDIA LIMITED
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COMMISSIONER OF CUSTOMS, MUMBAI v. MIS. TOYO ENGINEERING INDIA LIMITED AUGUST 31, 2006 [ASHOK BHAN ANDMARKANDEY KA TJU, JJ.] Customs Tariff Act, 1975; Tariff Heading 98.01/Project Import Scheme/ Notification No.72185-Cus. dated March 17, 1985: A B Classification-Import of auxiliary equipments for setting up of an C Industrial Plant-Tariff Heading 98. 0 I-Application for grant of benefit under the Project Import Scheme-Rejected by Revenue authorities-Affirmed by Appellate authorities-Reversed by the Tribunal-On appeal, Held: Heading 98.01 specifically mention and includes auxiliary equipments-Since fertilizer plant is an industrial plant specified under the Heading 98.01, all the D auxiliary equipments required for initial setting up of the plant could be imported under the Project Import Scheme-Mere possibility of using them subsequently for other purpose would not debar the assessee from availing the benefit of Project !mport Scheme. "Auxiliary"-Meaning of in the context of Tariff Heading 98.01 of the E Customs Tariff Act, 1975. Appeal/second appeal-Raising of submissions/grounds for the first time-Held: Not allowed-Practice and Procedure. Respondent-assessee engaged in the setting up of an industrial unit, a fertilizer plant, had entered into an agreement with their parent Company in Japan for designing, engineering, fabricating and commissioning of an Ammonia Storage Package Unit and a Co-generation Plant. The Parent Company in turn entered into an agreement with the assessee to carry out all the works, services, erection and commissioning of the project on turn F key basis. The assessee filed an application with the authority concerned for G grant of benefit under the Project Import Scheme read with Notification No. 72/85-Cus., dated 17.03.1985 in respect of goods sought to be imported for the purpose of setting up the plants. The application was rejected by the authority concerned on the ground that the imported goods are the property 657 H 658 SUPREME COURT REPORTS (20061 SUPP. 5 S.C.R. A of the assessee and could be used by them elsewhere after the completion of the present proJect, and the goods so imported would not qualify for classification under Heading 98.01 of the Tariff Act and consequently for getting the benefit under the Scheme. Aggrieved, the assessee filed an appeal before the revenue authorities, which was rejected by them. The assessee filed B second appeal before the Tribunal which was allowed by the Tribunal holding that the grounds on which both the lower authorities have denied the facility of project import to the respondent were not sustainable in law. Hence the present appeal filed by the Revenue. Revenue contended that the respondent-assessee is not eligible to get C the benefit of the project import scheme under heading 98.01 of the Tariff Act in view of the decision of this Court in the Punjab State Electricity Board v. Collector of Customs, Bombay, (1997) (91) ELT 247 (SC), Assessee submitted that in terms of note (2) to Chapter 98, Tariff Heading 98.01 of the Customs Tariff Act would apply to goods which are D imported in accordance with the Project Imports Regulations, 1986; that in terms of Regulation 4 the assessment under Heading 98.01 shall be available only to those goods which are imported against one or more specific contracts which have been registered with the appropriate Customs House; that in the absence of a specific contract being registered Heading 98,01 would not be applicable to the impugned goods as imported by the respondent; and that the E benefit of concessional duty under Project Import is not available ifthe goods had arrived before the application for grant of the benefit was submitted for registration of the goods. F G Dismissing the appeal, the Court HELD:t.1. Since the fertiliser plant is covered by the industrial plant specified in Heading 98.01 of the Customs Tariff Act all the "auxiliary equipments" which are required for the initial setting up of the plant could be 'imported under the Project Import Scheme. 1662-A-BI 1.2. What is required under heading 98.01 Tariff Act is that the machinery imported should be required 'for the initial setting 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, it is an
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