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Issues: Whether the spares imported under the 17 Bills of Entry were covered by the registered project contract and eligible for concessional assessment under the project import scheme.
Analysis: The contract expressly included operating spare parts up to 12,000 hours for scheduled maintenance. The guarantee period ended earlier, after 18 months or 9,000 hours, but that only meant supplies beyond the guarantee period were to be on payment and did not take them outside the contract. A separate agreement was required only for spares beyond 12,000 hours. The imports were also within the 10% ceiling for essential spare parts under Tariff Item 98.01 of the Customs Tariff, and the record supported that they were required for maintenance.
Conclusion: The spares were covered by the contract and the benefit of concessional assessment under the project import scheme was admissible, in favour of the assessee.
Ratio Decidendi: Where a registered project contract expressly covers operating spares for scheduled maintenance within the stipulated hours and the imported spares remain within the prescribed maintenance-spares limit, concessional project import treatment cannot be denied merely because the supplies were made after the guarantee period on payment basis.
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