Notification No. 68/98-Cus. (N.T.), dated 3rd September, 1998

Whereas maintenance spares (hereinafter referred to as the said spares) imported along with the goods required for the initial setting up of an industrial unit for the manufacture of Electronic items or the substantial expansion of an existing industrial unit manufacturing electronic items falling under heading number 98.01 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975 were assessed to concessional rate of duty under Notification No. 315/83-Customs, dated the 26th November, 1983 of the Government of India, Ministry of Finance, Department of Revenue (hereinafter referred to as the said notification).

2. AND WHEREAS, the notification No. 315/83-Customs, dated the 26th November, 1983 was amended by the notification No. 238/92-Customs, dated the 2nd July, 1992 providing explicit applicability of such concessional rate of duty under Notification No. 315/83-Customs, dated the 26th November, 1983 to the said spares by substituting the words "the industrial plant or project for the manufacture of electronic items" for the words "the initial setting up of industrial unit for the manufacture of electronic items or the substantial expansion of an existing industrial unit manufacturing electronic items" in the said notification No. 315/83-Customs, dated the 26th November, 1983.

3. AND WHEREAS, show cause notices for recovery of differential duty on the said spares were issued on the ground that such concessional rate of duty under the said notification No. 315/83-Customs, dated the 26th November, 1983 was available to goods required for initial setting up of the said units and not to the maintenance spares before the notification No. 238/92-Customs, dated the 2nd July, 1992 came into force.

4. AND WHEREAS, the Central Government is satisfied that according to the practice that was generally prevalent regarding levy of duty (including non-levy thereof) on the said spares imported along with the goods required for the initial setting up of an industrial unit for the manufacture of electronic items or the substantial expansion of an existing industrial unit manufacturing electronic items falling under heading number 98.01 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) were being allowed assessment under the said notification No. 315/83-Customs, dated the 26th November, 1983.

5. Now, therefore, in exercise of the powers conferred by section 28A of the Custom Act, 1962 (51 of 1962), the Central Government, hereby, directs that the duty of customs leviable under First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and auxiliary duty of Customs leviable under Section 43 of the Finance Act, 1986 (23 of 1986) on such import of said spares in excess of the duty payable under the said notification No. 315/83-Customs, dated the 26th November, 1983 but for the said practice shall not be required to be paid in respect of the said spares during the period commencing on and from the 27th November, 1983 and ending to 1st July, 1992.

Explanatory Notes:

The maintenance spares imported with the goods required for the initial setting up of an industrial unit for the manufacture of electronic items or the substantial expansion of an existing industrial unit manufacturing electronic items falling under heading number 98.01 of the Customs Tariff were allowed concessional rate of duty under notification No. 315/83-Customs, dated 26-11-1983 and subsequently demand notices were issued to disallow the exemption. To clarify the issue, notification No. 315/83-Customs was amended by notification No. 238/92-Customs, dated 2-7-1992 to allow concessional rate of duty to the said spares. The notification No. 238/92-Customs could not have the retrospective effect and, therefore, the subject notification had been issued to waive off differential duty of customs and auxiliary duty of Customs on the said spares during the period 27th November, 1983 to 1st July, 1992.