BHARUCHA, J. - (1.) THIS is an appeal against the judgment and order of the Customs, Excise and Gold (Control) Appellant Tribunal and it concerns the assessment of project imports for the purposes of Customs duty.
(2.) PRIOR to the introduction of Item 72A in the earlier Customs tariff, individual imports, though intended for a single project, were separately assessed to Customs duty. To obviate the inconveniences that resulted, the facility of project imports was introduced and it required that the contract relating to the Project import should be registered. The Project Imports (Registration of Contract) Regulations, 1965, were introduced as a consequence. They provide that every importer claiming assessment of articles falling under the relevant entry, being Heading 84.66 of the present Customs Tariff, should apply to the appropriate officer of Customs at the port where the goods are to be imported for registration of his contract. The application in that behalf must specify ''such other particulars as may be considered necessary by the Appropriate Officer for the purposes of assessment under the said Heading.'' The appellants entered into a contract on 19/12/1978, with corporations doing business in the United States of America in the style of 'Hercofina' to purchase manufacturing equipment, apparatus, machinery, including spare parts and accessories, comprised in Hercofina's plant at Burlington, New Jersey, USA, for manufacture of Dimethyl Terephthlate (DMT) at the price of US $ 10,000,000.00 (US $ ten million). The appellants applied for registration of the said contract under the Project Import Registration of Contract Regulations, 1965, (hereinafter called ''the said Regulations''). On 11/04/1979, the appellants were informed by the Under Secretary to the Government of India in the Department of Industrial Development. Ministry of Industry that the Government had approved the import by the appellants of the aforesaid capital goods for the production of DMT for the CIF value of US $ 17 millon. It was noted in the said letter that the appellants would be incurring as dismantling charges the cost of US $ 5. 50 million for which necessary clearance from the Reserve Bank should be obtained. On 21/05/1979. the Deputy Secretary in the Ministry of Petroleum, Chemicals and Fertilizers required the appellants to furnish a certificate from a firm of Chartered Engineers regarding the soundness and reliability of the aforesaid plant before incurring any expenditure for its purchase. On 1/08/1981, the Under Secretary in the Department of Economic Affairs in the Ministry of Finance informed the Reserve Bank that the Government had approved the procurement of capital goods, technical assistance. etc., in connection with the DMT project of the appellants thus : JUDGEMENT_77_4_1997Html1.htm On 24/08/1982, the Assistant Collector of Customs, Bombay, informed the appellants that the said contract had been registered and that spares to the extent of 10 per cent of the value of the main machinery were eligible for the confessional rate of assessment under Heading 84.66(II). On 30/09/1982, the Reserve Bank informed the appellants that it had agreed to the expenditure by the appellants of US $ 5.5. million towards dismantling and other charges in respect of the import of the aforesaid plant, which charges were not required to be endorsed on the import licence issued for that import. On 8/10/1982, the Joint Controller of Imports nd Exports wrote to the Collector of Customs, Bombay asking the Collector not to debit the said dismantling charges to the face value of the said import licence. It was contended by the appellants before the Tribunal that there had been a pre-assessment of the said plant and that, therefore, the Collector of Customs was in error in applying the provisions of Section 14 of the Customs Act to the valuation of the said plant for the purposes of Customs duty. The Tribunal did not accept the argument that the registration of the said contract by the Customs in terms of the said Regulations amounted to pre-assessment of the value of the said plant. It accepted the argument on behalf of the Revenue that there had only been a provisional assessment and it was open to the Collector to value the said plant on the basis of Section 14.
(3.) BEFORE us it was accepted that there had been only a provisional assessment at the stage when the said contract was registered under the said Regulations, but it was submitted that once the value of the said plant was determined at US $ 17 million and the said contract was registered under the said Regulations read with Heading 84.66. then, for the purposes of the final assessment, the value of the said plant had to be taken to be the value that had been so determined and it was open to the Customs authorities not to accept that value only if there was material to indicate that it was arrived at on account of some error or a particular item fell outside the scope of the project import. We find it difficult to accept the submission. Once it is accepted that there is no more than a provisional assessment at the stage when the contract is registered under the said Regulations, it is open to the Customs authorities to make a final assessment taking into account all factors that are relevant thereto, and they are not inhibited by reason of the registration of the contract under the said Regulations. The question now is whether the Customs authorities have taken relevant factors into account in making the final assessment of the said plant.;