Project import assessment cannot be denied merely because installed machinery was later sold after genuine use.

Imported project goods that were bona fide brought into the factory for intended manufacture, installed, and used for more than two years could not be denied assessment under Heading 98.01 merely because the plant was later sold after becoming unviable. The absence of any express restriction in Notification No. 132/85, the Project Import Regulations, 1986, or Heading 98.01 meant that post-use sale did not defeat project-import treatment. The cited precedent on non-use of imported goods was distinguished because the goods here were actually put to their intended use. The demand was therefore unsustainable.

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Issues: Whether the benefit of assessment under Heading 98.01 of the Customs Tariff Act could be denied merely because the imported plant, after being installed and used for more than two years, was later sold.

Analysis: The import was made for bona fide use in the assessee's factory, the machinery was installed and put to use for the intended manufacture, and the plant remained in operation for a substantial period before being disposed of after becoming unviable. No provision in Notification No. 132/85, the Project Import Regulations, 1986, or Heading 98.01 prohibited sale of the machinery after such use. The benefit under Heading 98.01 is a facility intended to simplify assessment of complete plants, and it cannot be denied in the absence of a specific restriction. The cited precedent on non-use of imported goods was distinguished because, in the present case, the goods had in fact been used for the intended purpose.

Conclusion: The benefit under Heading 98.01 could not be denied on the ground of later sale after use, and the demand was unsustainable.

Ratio Decidendi: In the absence of an express prohibition, imported project goods that were installed and used for their intended purpose cannot be denied project-import assessment merely because they were subsequently sold.

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