Per Justice U.L. Bhat :

These appeals have come up before us for hearing on reference by a two-Member Bench which disagreed with the decision of a three-Member Bench of the Tribunal in Punjab State Electricity Board Vs. CCE, Bombay 1987 (27) ELT 432.

2. The common appellant, a Govt. of India Undertaking was granted an industrial licence with a view to set up Alumina/Aluminium Complex consisting of a fully mechanised bauxite mine in Koraput with an annual capacity of 2.4 million tonnes, an aluminium refinery in Koraput 14 KMs away from the mine to extract 8,00,000 tonnes of alumina annually, modern aluminium smelter at Dhenkanol 800 KMs away from the refinery to produce 2,18,000 tonnes of aluminium per year, a 600 M.W. captive power plant to supply power to Smelter Unit and Port facilities at Visakhapatnam Port (150 KMs away from the refinery) for export of 3,75,000 tonnes of alumina per year and import of 1,46,000 tonnes of Caustic Soda Lye per year. The import licence granted to the appellant covers equipment for setting up alumina refinery and equipments required for port facility. The list of goods was endorsed by the licensing authority for "Project Imports". By letter dated 27.4.85, addressed to the Collector of Customs, Visakhapatnam, the Joint Secretary in the Ministry of Mines and Coals (Department of Mines) recommended grant of facility for the goods to be imported for the Project against import licence. Appellant thereupon applied to the Assistant Collector of Customs for registration of their contracts under the Project Imports (Registration of contracts) Regulation Act (Sic), 1965 with a view to secure the benefit of tariff rate of duty for Project Import under Tariff Heading 84.66 of the Customs Tariff Act, 1975.

3. The dispute in these appeals relates to applications of registration of contract for the supply of equipment for the port facility at Visakhapatnam. The Assistant Collector rejected the applications holding that "Visakhapatnam Port facilities Alumina Conveying System" of the appellant does not fall under any of the serial numbers of 84.66, that it does not fall in the category of "Industrial Plant" since the port facility project is designed at Visakhapatnam far away from the site of the refinery, for convenient handling and transport of bulk raw materials and bulk finished materials respectively from shipholds to wagons and vice versa and no manufacturing or extraction or mining operation takes place at Visakhapatnam and hence the port facility project cannot be considered to be a project for industrial plant. Assistant Collector passed 5 different orders on 5 applications. Appellant preferred five appeals before the Collector (Appeals) who dismissed the same by separate orders rejecting the contention that "Visakhapatnam Port facilities Alumina Conveying System" is an extended arm of the industrial plant (refinery) and holding that though the equipment sought to be imported could be considered as auxiliary equipment, that they are more in the nature of equipment for transport from ship to the wagon and vice versa and cannot be considered as required for an industrial plant. Collector (Appeals) commented on the functional use of the imported equipment and indicated that it is not used in any industrial plant and therefore would not fall under tariff heading 84.66.

4. When the appeal was argued before a 2-Member Bench, on behalf of the Department reliance was placed on a decision of a 3-Member Bench of the Tribunal in Punjab State Electricity Board Vs. Collector of Customs, Bombay 1987 (27) ELT 432 (T). The case related to project for generation of power. The question was whether transmission sub-stations for transmission of power generated in the power generation project would fall under heading 84.66. The Tribunal held that transmission sub-stations do not play any role in the generation of power and therefore do not fall under 84.66 (i) of the Tariff. There was also a question whether special vehic