Customs Appeal No.75108 of 2016: Final Order Set Aside by Tribunal

Case Name:

Customs Appeal No.75108 of 2016: M/s. Nortech Power Projects Private Limited vs. Commissioner of Customs (Port), Kolkata

Key Takeaways:

1. The Tribunal set aside the Order-in-Original that directed the finalization of provisional assessment and denied project import benefits to the appellant.
2. The appellant had imported goods for two projects, but due to unforeseen circumstances, the project meant for one location could not be executed, and another site was sanctioned and approved.
3. The Tribunal found that the issuance of the Show Cause Notice was misplaced and disallowing the benefit of the project import regulations was considered an error of judgment.
4. The department was directed to undertake and complete the reconciliation process within two months and take appropriate action for the immediate release of the Security Deposit due to the appellants.

Case Synopsis:

The appeal was filed by M/s. Nortech Power Projects Private Limited against the Order-in-Original No. KOL/CUS/PORT/COMM/31/2015 dated 16.10.2015 passed by the Commissioner of Customs (Port), Kolkata.

The appeal was heard by HON’BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL) and HON’BLE SHRI RAJEEV TANDON, MEMBER (TECHNICAL). The final order, numbered 77495/2023, was issued on 9 November 2023.

The appeal was filed against the Order-in-Original that directed the finalization of provisional assessment under section 18(2) of the Customs Act read with Regulation 17 of the Project Import Regulations, 1986 for a project registered by the appellant, denying them the project imports benefits under the said regulation, and levying merit rate of duty as applicable besides payment of interest. The Commissioner also ordered enforcement of the provisional duty bond and adjustment of the Security Deposit towards differential duty liability. Additionally, the Commissioner directed confiscation of the goods for non-compliance of the post import conditions of the Project Import Regulations, with an option of redemption and allowed the release of the said goods on payment of redemption fine and penalty imposed on the appellant under section 112(a) of the Customs Act, 1962.

The appellant had imported turbines, generators, a hydraulic unit, and a digital tribune control for two projects to be installed at Yapak Nallah MHS and Dus Nallah MHS for initial setting up of a mini hydroelectric power plant. However, due to flash floods, the project meant for Dus Nallah could not be executed, and another site at Teepani MHS was sanctioned by the Governor of Arunachal Pradesh and approved. The appellant provided ample correspondence to demonstrate the relocation of the project meant for Dus Nallah.

The Tribunal noted that the issuance of the Show Cause Notice was misplaced and misdirected, and despite taking note of the factual position, disallowing the benefit of the project import regulations and the concessional rate of duty was considered an error of judgment. The Tribunal also observed that the appellant had repeatedly written to the department regarding the refund of the Security Deposit, post-completion of the project and submission of the required documents.

In view of the factual matrix, the Tribunal found that there was no case made out in support of the adjudication order passed by the Ld. Commissioner. Therefore, the impugned order was set aside, and the department was directed to undertake and complete the reconciliation process within two months of the receipt of this order. It was clarified that the trans-positioning/trans-location of the imported goods to the Teepani site, for which ample correspondence had been duly made over by the appellant to the department, shall have no bearing in the finalization/reconciliation process and will not be an impediment for the grant of project import benefit to the appellants if otherwise admissible. Post completion of the reconciliation process, the department was expected to take appropriate action for the immediate release of the Security Deposit, as due to the appellants.

In conclusion, the appeal was allowed in the aforesaid terms, and the operative part of the order was pronounced in the open Court by HON’BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL) and HON’BLE SHRI RAJEEV TANDON, MEMBER (TECHNICAL).

FAQ:

Q1: What was the outcome of the appeal?

A1: The appeal was allowed, and the impugned order was set aside by the Tribunal.

Q2: What were the key issues in the case?

A2: The case involved the denial of project import benefits, relocation of the project site, and the department’s delay in refunding the Security Deposit.

Q3: What action was directed by the Tribunal?

A3: The department was directed to undertake and complete the reconciliation process within two months and take appropriate action for the immediate release of the Security Deposit due to the appellants.