1. Import of self-propelled vehicle for transporting transformers — Dispute over eligibility for assessment as project import under customs tariff. (Para 1 )
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1997 Supreme(SC) 372
SUPREME COURT OF INDIA
A.M Ahmadi, C.J.I., S P Kurdukar, J.
PUNJAB STATE ELECTRICITY BOARD, PATIALA, APPELLANTS
VERSUS
COLLECTOR OF CUSTOMS, BOMBAY, RESPONDENT.
Civil Appeal No. 4432 of 1986, decided on February 27, 1997.
Vehicles used for transporting transformers to sub-stations are not considered integral parts of a power project and therefore do not qualify for assessment as "project imports" under the relevant customs tariff entry.
Headnote:(A) Customs Tariff - Item 84.66 - Project Import - Import of self-propelled vehicle for transporting transformers to sub-stations - Whether such vehicle qualifies as auxiliary equipment for the initial setting up or substantial expansion of a power project - Language of the entry indicates that vehicles used in the shifting of transformers do not constitute an integral part of the power project and therefore do not attract the provision of Entry 84.66. (Paras 2 and 3)
Facts of the case:
An application was made for the registration of a contract for the import of a self-propelled vehicle intended for transporting transformers from railway stations to various sub-stations. The authorities rejected the application for "project import" status, holding that the vehicle was used for transportation and had no direct relation to power generation or the project itself. This view was upheld by the Appellate Collector and the Tribunal, which noted that even if considered auxiliary equipment, it was not eligible for assessment as a project import.
Findings of Court:
The authorities below rightly construed the entry, as the vehicle used for shifting transformers is not an integral part of the power project.
Issues: Whether a vehicle used for the transportation of transformers to sub-stations qualifies as a project import under the relevant tariff entry.
Ratio Decidendi: The court held that the language of the tariff entry implies that vehicles used for shifting transformers are not integral to the power project and thus are ineligible for assessment as project imports.
Result: Appeal dismissed.
Legal Category Hierarchy
Table of Contents
2. Whether vehicles used for transporting transformers to erection sites constitute auxiliary equipment for a power project eligible for project import assessment. (Para 1 )
3. Vehicles used for shifting transformers are not integral parts of a power project and thus fall outside the scope of project import provisions. (Para 3 )
4. Equipment used for transporting components to a site, rather than being integral to the project's operation, does not qualify as project import. (Para 3 )
5. Appeal dismissed; concurrent findings of lower authorities upheld. (Para 3 )
6. Does a vehicle used for transporting transformers to a site qualify as a project import under Tariff Entry 84.66?
No. The court held that vehicles used for shifting transformers do not constitute an integral part of a power project and therefore do not attract the provisions of Entry 84.66. (Para 3 )
7. What are the requirements for auxiliary equipment to be eligible for assessment as a project import under Entry 84.66?
Auxiliary equipment must be required for the initial setting up of a unit or the substantial expansion of existing units of a specified power project. (Para 2 )
8. Whether equipment intended only to facilitate the movement of components constitutes an integral part of a power project?
No. Equipment intended only to facilitate the movement of components, such as transformers, is not considered an integral part of the project and is ineligible for project import assessment. (Para 1 , 3 )
ORDER
1. The appellants made an application for registration of the contract dated 25-6-1981 for import of one 200 metric tonnes self- propelled vehicle from Italy. They sought clearance of goods against import licence dated 18-6-1981. The vehicle was required for transporting 100 MVA transformers from railway station to the sites of 7 sub-stations set up by the appellants at various places in the States of Punjab and Haryana. The Assistant Collector of Customs rejected the application holding that the vehicle proposed to be imported was mainly required for transportation of transformers from the railway yards to the erection sites and had no relation to power generation or power project. He was, therefore, of the opinion that the import clearly fell outside the scope of project import. The appellants therefore had to clear the vehicle on payment of duty as assessed by the Customs House which duty was paid under protest. In appeal, the Collectors order was confirmed by the Appellate Collector. The Appellate Collector held that the vehicle was not meant for any single project and was intended to be used only to facilitate movement of transformers and hence could not be considered to be a part of the project. The Tribunal to which the matter was then carried also held that the vehicle was imported for movement of transformers and even if it was considered to be auxiliary equipment, it was not eligible for assessment as project import and accordingly dismissed the appeal. It is against this concurrent finding recorded by all the three authorities that the present appeal is filed.
2. The relevant part of Item 84.66 of the tariff entry was brought to our notice. It provides "that all items of auxiliary equipment, as well as, all components (whether finished or not) or raw materials for the manufacture of the aforesaid items and their components, required for the initial setting up of a unit, or the substantial expansion of existing units, of a specified power project would be eligible for assessment as project import.
3. 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 provision of Entry 84.66. We are, therefore, of the view that the authorities below have rightly construed the entry and we see no reason to interfere with the view taken by the authorities. We, therefore, see no merit in this appeal and dismiss the same with no order as to costs.
