ASIATIC OXYGEN LTD. Vs. ASSISTANT COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) THE question involved in this case is whether the petitioner can avail of the concessional rate of duty under Heading of 84.66 of Section XVI of the Customs Tariff Act, 1975. The said Heading in so far as it is material read as follows : 84.66(i) all items of... 40% ***** ***** *****(d) auxiliary equipment, as well as all components (whether finished or not) or raw materials for the manufacture of the aforesaid items and their components required for the initial setting up of a unit, or the substantial expansion of an existing unit of a specified : 1. Industrial plant:***** ***** *****Provided these are imported (whether in one or in more than one consignment) against one or more specific contracts, which have been registered with the appropriate Custom House in the manner prescribed by regulations which Central Board of Excise and Customs may make under Section 157 of the Customs Act, 1962 and such contract or contracts has or have been so registered before any order is made by the proper officer of customs permitting the clearance for home consumption, or deposit in a warehouse of items, components or raw materials. Therefore in order to qualify for the concessional rate (i) the goods sought to be imported would have to be required for the initial setting up of the unit or for a substantial expansion thereof (ii) The contract under which the goods were to be imported would have to be registered with the appropriate Custom House in accordance with the regulation framed by the Central Board of Excise and Customs therefor.

(2.) THE undisputed facts of this case are as follows. The petitioner carries on the business of manufacturing diverse gases. In 1966 the petitioner started four new units for manufacturing gases at Bangalore, Bombay, Hyderabad and Rourkela (hereinafter referred to as the said units). The petitioner obtained Industrial Licences for that purpose. According to the petitioner the full licensed capacity of the said units could not be achieved at a time because they were unable to import the requisite number of gas cylinders. As a result from time to time they obtained import licences for the phased implementation of the licensed capacity of the said units.

(3.) BY a letter dated 7th June, 1975 to the CCI and E, the DGTD recommended endorsement of the project import licence to be issued for the Import of the said empty gas cylinders under 72A of the Indian Customs Tariff. According to the petitioner the CCI and E issued a licence in favour of the petitioner for import of the said gas cylinders with the said endorsment. By a letter dated 2 -8 -1978 the CCI and E wrote to the petitioner stating that the licence had been endorsed for project import for assessment under Heading No. 84.66 of Section XVI of the Customs Tariff Act, 1975. It was also stated - 'A copy of the licence has been forwarded to the Collector of Customs, Calcutta, for such action as they deem fit' In July 1978 the petitioner entered into a contract with a Japanese firm for supply of the said cylinders (hereinafter referred to as the said contract).