Santosh Hegde, J. - (1.) This appeal is directed against the order of the Customs, Excise and Gold (Control) Appellate Tribunal, (the 'tribunal'), West Regional Bench, Mumbai dated 15th July, 1999 made in Appeal No. C/366/94A.
(2.) The appellant which is an approved unit situated in the Kandla Free Trade Zone (KFTZ) was authorised to manufacture one lakh ton of Cold Rolled Closed Annealed (CRCA) and Tin Mill Black Plate (TMBP) Coils per year under a licence issued by the Ministry of Commerce, Government of India on 30-3-1981. The said Ministry by a letter dated 2-7-1982 approved the proposal of the appellant for import into the KFTZ of second-hand machinery for the purpose of the manufacture of the CRCA and TMBP under certain conditions which included that the imported machineries should not be over 10 years old and it should have a residual life of at least 5 years. Based on the said permission, the appellant imported between the period 1983 and 1987 second hand machineries as capital goods for which they had filed as many as 17 Bills of Entry and claimed the benefit of Notification No. 77/90-Cus. dated 17-4-1980. On 7-2-1992, the Customs Authorities issued a show-cause notice to the appellant alleging among other grounds that the appellant had imported contrary to the import licence, one new Thyristor Converter over and above the Motor Generator Set, a part of the Temper Mill and certain quantity of ceramic wool as a new component for the purpose of fabrication of the Bright Annealing Furnace.
(3.) In the proceedings before the Collector of Customs, the appellant contended that the import was made with the permission of the authorities of KFTZ issued to them vide permission letter No. FTZ/Adm/2/822/90-IV/4750 dated 25/30-4-1991. They also contended that the import made by them was governed by the import export policy applicable for the year 1983-84 and the Thyristor Converter system was imported as a part of the complete Temper Mill which was in a second-hand condition. The said Thyistor Converter though was a new part of the Temper Mill, the same constituted in value equivalent to only 9% of the total value of the Temper Mill and this particular machinery part was imported as an alternative to Motor Generator Set which was supplied in a non working condition by the supplier. Similarly, it was contended that so far as ceramic wool which was also a new component of the annealing furnace, the same had to be new since the said ceramic wool had a limited life span, hence when a second-hand annealing furnace was to be installed, it was imperative that the ceramic wool in the same had to be replaced with new wool because the old ceramic wool had outlived its utility.;