1. Import of spares under a registered contract — Customs duty imposed following de-registration by Customs authorities — Dispute over project import status. (Para 2 )
Back
Next 
1996 Supreme(SC) 1676
SUPREME COURT OF INDIA
S.C.Sen : S.P.Bharucha
Ballarpur Industries
Versus
Collector Of Customs
Case No. : .
Date of Decision : 10/10/96
The court addressed whether customs authorities possess the power to de-register a contract registered by a different authority to levy duties on spares, ruling that this jurisdictional question must be determined by the tribunal.
Headnote:(A) Customs Duty - Project Imports - Registration of Contract - De-registration of a contract registered by the registering authority - Whether the customs authorities have the power to de-register a contract registered by a different authority, treating the import of spares as having been made under a separate contract, thereby making them liable for duty - Matter remanded to the tribunal to consider this specific aspect. (Para 2)
Facts of the case:
A contract was registered by the appropriate authority, entitling the importers to specific benefits. The customs authorities decided to de-register the contract, treating the import of initial spares as separate imports rather than project imports, and consequently levied customs duty on those spares.
Findings of Court:
The order of the appellate tribunal is set aside because it apparently failed to consider whether the power to de-register a contract rests exclusively with the authority that originally registered it, rather than with the customs authorities.
Issues: Whether a contract registered by a specific authority can be de-registered by the customs authorities or if such power is vested solely in the registering authority.
Ratio Decidendi: The court determined that the question of which authority is competent to de-register a registered contract is a material point that requires a fresh hearing and decision by the tribunal.
Result: Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Whether a contract registered by the registering authority can be de-registered by Customs authorities or only by the authority that performed the registration. (Para 2 )
3. The tribunal failed to consider whether the authority that registered the contract is the only entity empowered to de-register it. (Para 1 , 2 )
4. The tribunal must determine if a contract registered by a specific authority can be legally de-registered by a different authority. (Para 2 )
5. Appeal allowed — Order set aside — Matter remanded to the tribunal for fresh consideration of the de-registration authority. (Para 1 , 3 )
6. Can Customs authorities de-register a contract registered by a different authority?
The court held that the tribunal must consider whether a contract registered by the registering authority can be de-registered only by that authority and not by the Customs authorities. (Para 2 )
7. What is the impact of contract de-registration on the import of spares?
De-registration of a contract may result in the import of spares being treated as separate contracts rather than project imports, thereby making them liable for Customs duty. (Para 2 )
(1) HAVING heard learned Counsel, we are of the view that the order of Customs, Excise and Gold (Control) Appellate tribunal under appeal must be set aside and the matter remanded to the tribunal to consider an aspect which, apparently, was not presented before it.
(2) THIS was contract registered by the D.G.T.D. and the appellants were entitled to the benefit of such registration. They were made liable to Customs duty on initial spares that they had imported, which would otherwise have been treated as "project imports", on the ground that the Customs authorities had decided to de-register the contract, treating the import of the spares as having been made under a separate contract. Whether the contract could have been de-registered only by the authority which had registered it and not the Customs authorities requires to be sidered.
(3) THE appeal must be allowed. The older under appeal is set aside. The appeal [being "CD(SB)T Appeal No. 587/78-B.2] is restored to the file of the tribunal to be heard and decided afresh. It shall be open to both the parties to place before the tribunal the appropriate pleadings and material in support of their respective stands on the aspect referred to above. No order as to costs.
