Project import benefit for ion-exchange resins upheld where the plant component was integral and not substantially consumed.

Ion-exchange resins imported for a water treatment plant were treated as an integral and recurring component of the plant, not as consumables substantially used up in the process. On that basis, the resins remained eligible for classification under Heading 9801 and project import benefit could not be denied. The text also notes that water supply projects for purification and demineralisation fell within the relevant notification, and that even on a consumables assumption the value stayed within the permissible limit. The denial of the customs benefit was therefore unjustified.

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Issues: Whether ion-exchange resins imported for a water treatment plant were consumables excluded from project import benefit, or an integral component eligible for assessment under Heading 9801.

Analysis: The appellate authority had found, on the basis of technical literature, that the ion-exchange resin bed formed an integral part of the water softening unit, was regenerated periodically, and was not substantially consumed in the process. It also noted that water supply projects for purification and demineralisation were covered by the relevant notification and that, even on the assumption that the item was consumable, the value did not exceed the permissible limit. The Revenue did not successfully controvert these factual findings or the supporting literature, and the reasoning adopted was consistent with the cited precedent.

Conclusion: The resins were not consumables for the purpose of denying project import benefit and were eligible for classification under Heading 9801.

Final Conclusion: The denial of project import benefit was not justified, and the assessee remained entitled to the claimed customs benefit.

Ratio Decidendi: An item that functions as an integral and recurring component of a plant, and is not substantially consumed in the process, is not to be treated as a consumable so as to deny project import benefit.

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