Sector-specific incentive scheme limits SHIS benefit to capital goods used in the specified industry, not unrelated accessories.

The Status Holders Incentive Scrip scheme under Notification No. 104/2009-Cus and paragraph 3.16 of the Foreign Trade Policy was confined to technology upgradation in the specified sectors and to capital goods imported for that sector under actual user condition. Accessories imported for a steam turbine generator set used for electricity generation were not shown to be capital goods for the basic chemical industry or connected with its sector-specific technology upgradation. The appellants were therefore not eligible for SHIS benefit on the impugned goods.

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Issues: Whether the benefit of the Status Holders Incentive Scrip scheme was available for accessories imported for a steam turbine generator set, and whether such goods could be treated as capital goods relating to the specified chemical sector.

Analysis: The scheme under Notification No. 104/2009-Cus and paragraph 3.16 of the Foreign Trade Policy was held to be an incentive linked to technology upgradation in the specified sectors mentioned in paragraph 3.16.4. The benefit was confined to capital goods imported for the relevant sector under actual user condition. The imported accessories were for a steam turbine generator used for generation of electricity and were not shown to be capital goods relating to basic chemical industry or to technology upgradation of that sector.

Conclusion: The appellants were not eligible for the SHIS benefit on the impugned goods.

Final Conclusion: Sector-specific incentive benefits cannot be claimed for goods that are not connected with the specified industrial sector for which the scheme was framed.

Ratio Decidendi: Eligibility under a sector-specific incentive scheme must be determined by the express scope of the scheme and the specified sector coverage, and goods outside that sector cannot qualify merely because they are capital goods or are indirectly used in production.

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