Project import benefit under Heading 9801 denied for VSAT equipment used for communication and inventory control.

VSAT equipment installed at different locations and used for communication between the manufacturer, distributor and marketing points was held not to qualify as auxiliary equipment or as goods covered by Heading 9801 for project import benefit. The project-import entry applies only to machinery, instruments, apparatus, appliances, control gear, transmission equipment, auxiliary equipment, components, raw materials and spare parts required for the initial setting up or substantial expansion of a specified project. On the facts, the equipment was used for inventory control and was not shown to be required for initial plant setup within the scope of the heading. The claim for project import treatment was therefore rejected.

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Issues: Whether VSAT equipment installed at different places and used for communication purposes could be treated as auxiliary equipment or otherwise covered under Heading 9801 for project import benefit.

Analysis: The relevant project-import entry under Heading 9801 extends to specified machinery, instruments, apparatus, appliances, control gear, transmission equipment, auxiliary equipment, components, raw materials and spare parts required for the initial setting up or substantial expansion of a specified project. The goods in question were found to be VSAT equipments used only for communication between the manufacturer, distributor and marketing points to improve inventory control. On the facts, they were not shown to be equipment required for the initial setting up of the plant in the sense contemplated by the heading. The cited authorities were distinguished on facts, and the lower appellate authority's view was found to be consistent with the scope of the heading.

Conclusion: The goods did not fall under Heading 9801, and the claim to project import benefit was rejected.

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