TOYO ENGINEERING INDIA LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE Bench which heard the appeal filed by M/s. Toyo Engineering India Ltd. against the Order -in -Appeal No. 3772/88, dated 07.11.1988, holding that the machinery and equipment imported by them could not be classified under Heading 98.01 of the First Schedule to the Customs Tariff Act, 1975 and denying the benefit of Project Import under the Project Import Regulation, has referred the following questions to the Larger Bench:

(2.) WE heard Shri L.P. Asthana, learned Advocate for the Appellants, and Shri Sanjay Srivastava, learned D.R. for the Revenue. Heading 98.01 of the C.T.A. reads as under : -

(3.) THE learned Advocate has submitted that fertiliser plant is covered by Industrial Plant mentioned at Srl. No. 1 in Heading No. 98.01; that the construction machinery imported by them is covered by auxiliary equipment mentioned in the heading and were required for the initial setting up of the unit; that Heading 98.01 is applicable to all items of machinery required for the specified project for the purpose of initial setting up or for the substantial expansion of such project; that auxiliary equipments cannot become part and parcel of the plant; that any equipment which becomes part and parcel of the plant will not be termed as auxiliary equipment. The learned D.R., on the other hand, contended that fertiliser plant is not covered by expression 'Industrial Plant', and as such it can be covered only under Sri. No. 6 of the heading 98.01, if the same has been notified by the Central Government in the official gazette; that no such notification has been issued. He also referred to the definition of the industrial plant given in Regulation 3 of the Project Imports Regulations, 1986 according to which Industrial Plant means an industrial system designed to be employed directly in the performance of any process or series of processes necessary for manufacture, production or extraction of a commodity. He, further, submitted that the decision in the case of PSEB (supra) has been confirmed by the Supreme Court in Punjab State Electricity Board v. Collector of Customs, Bombay, : 1997 (91) E.L.T. 247 (S.C.) wherein it was held that "The very language of the Entry would indicate that vehicles which are used in the shifting of transformers would not constitute an integral part of the power project and would, therefore, not attract the provisions of Entry 84.66." In reply Shri Asthana referred to the decision of the Larger Bench of the Appellate Tribunal in the case of National Aluminium Co. Ltd. v. C.C., Madras, : 1997 (94) E.L.T. 409 (T) wherein the Larger Bench considered the Supreme Court's decision in PSEB's case (supra) and interpreted the decision by observing as under : -