Project import concession for colour film processing equipment upheld where licence, sponsorship, and accepted tariff interpretation were satisfied.

Fully automatic and computerised colour film processing equipment imported for a mini colour laboratory was treated as eligible for project import concession under the relevant tariff heading, because the import had the required licence and sponsoring authority recommendation, and a Government circular recognised such laboratories as admissible subject to normal conditions. The text also notes reliance on a Madras High Court ruling on identical facts and the absence of any contrary higher court view. On that basis, the departmental objection that the laboratory was only a service or job industry was rejected and the project import benefit was allowed.

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Issues: Whether fully automatic and computerised colour film processing equipment imported for a mini colour laboratory was entitled to project import concession under Heading 84.66; whether such a colour processing laboratory could be treated as an industrial plant for that purpose.

Analysis: The import was supported by the requisite licence and sponsoring authority recommendation under the Project Import (Registration of Contract) Regulation, 1965. A Government circular also indicated that project import facility was admissible for an automatic colour film process laboratory subject to usual conditions. The decision was further guided by the Madras High Court ruling on identical facts, and there was no contrary view from any other High Court or the Supreme Court. In that setting, the tribunal did not accept the departmental objection that the laboratory was merely a service or job industry and declined to re-examine the merits against the settled view.

Conclusion: The import qualified for project import treatment and the assessee was entitled to the concession.

Final Conclusion: The appellate order denying project import benefit was set aside and relief followed in consequence.

Ratio Decidendi: Where the import satisfies the project import conditions and a colour film processing laboratory is covered by the accepted interpretation of the relevant tariff heading, project import concession cannot be denied merely on the ground that the activity is characterised as a service industry.

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