CHAMBAL FERTILISERS & CHEMICALS LTD. Vs. CC (IMPORT)

JUDGEMENT

(1.) THE issue raised in this appeal at the instance of the importer is whether they are entitled to claim exemption from Customs duty under Notification No. 11/97 dated 1.3.97 in respect of 120 MT AC -395 Demag Crane imported under Bill of Entry dated 13.8.98 under the provisions of the Project Import Regulations, 1986.

(2.) THE appellant was granted a letter of Intent by the Government of India on 16.1.84 to put up a natural gas based fertilizer plant. In order to erect the manufacturing unit, the appellant had to import plant and machinery from abroad. Import of such items of machinery was covered by Chapter 98, Heading 98.01 of the First Schedule to the Customs Tariff Act, 1975. The assessment and clearance of the items of machinery were governed by the Project Imports Regulations, 1986 framed under Section 157 of the Customs Act, 1962. After commissioning of the first plant the appellant undertook an expansion project titled as Gadepan -II Fertilizer Plant. One of the equipments required for Gadepan -II Project was 120 -AC 395 Demag Crane which was imported against invoice dated 30.6.98 and cleared under Bill of Entry dated 13.8.98. The appellant took the stand that the said crane would also enjoy zero duty benefit under Heading 98.01 which reads as follows:

(3.) BUT the Customs authorities required the appellant to pay provisional duty of a sum of Rs. 1,00,000 which was paid under protest under cover of three challans dated 2.2.99, 4.3.99 and 31.3.99. The Assistant Commissioner of Customs issued show cause notice on 28.9.99 requiring the appellant to show cause as to why the subject crane be not classified under Customs Tariff Heading 8426.41 and further amount 63,69,482 be not recovered from the appellant. Appellant replied putting forth his case that crane would come under Chapter Heading 98.01 and be entitled to duty exemption. Reliance was also placed on the letter dated 21.4.98 issued by the Ministry of Chemicals & Fertilizers addressed to the Collector of Customs, Group -V Mumbai referring to list of goods required for the appellant's Gadepan -II Project and directing that the goods covered by the same list be exempt from Customs duty on import. One of the items was the subject crane in question. After personal hearing on 10.2.2000 the original authority passed an order dated 24.4.2000 rejecting the contentions raised by the appellant.