Strict construction of project import entries barred graphic art films; non-statutory recommendations could not override customs requirements.

Project import benefits were construed strictly: graphic art films were held not to fall within Entry 84.66(i) because that provision covered only the enumerated machinery, equipment and related components or manufacture inputs, and the "initial setting up" language could not enlarge the entry to non-listed goods. They also did not qualify under Entry 84.66(ii), which is limited to spare parts, raw materials or consumable stores imported under a registered contract and essential for maintenance of the plant or project. The Director General, Technical Development's recommendation had no binding statutory force and could not override the customs and project import requirements.

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Issues: (i) whether graphic art films were covered by Entry 84.66(i) for project import registration on the footing that they were required for the initial setting up of the unit and testing of the machinery; (ii) whether the same goods were covered by Entry 84.66(ii) as spare parts, raw materials or consumable stores essential for the maintenance of the plant or project; (iii) whether the recommendation of the Director General, Technical Development had binding statutory effect.

Issue (i): whether graphic art films were covered by Entry 84.66(i) for project import registration on the footing that they were required for the initial setting up of the unit and testing of the machinery.

Analysis: Entry 84.66(i) applies to machinery, instruments, apparatus, appliances, control gear, transmission equipment and auxiliary equipment, together with components or raw materials for the manufacture of those items. The language of clause (d) necessarily refers back to the preceding items and cannot be extended to graphic art films, which do not fall within clauses (a), (b) or (c). The words relating to initial setting up of a unit cannot be invoked to bring in an item outside the scope of the enumerated goods, and the quantity imported was irrelevant to that construction.

Conclusion: Graphic art films were not covered by Entry 84.66(i), and the assessee was not entitled to project import registration on that basis.

Issue (ii): whether the same goods were covered by Entry 84.66(ii) as spare parts, raw materials or consumable stores essential for the maintenance of the plant or project.

Analysis: Entry 84.66(ii) permits only those spare parts, raw materials or consumable stores that are imported as part of a registered contract and whose total value does not exceed 10% of the value of the goods under sub-heading (i), provided they are essential for the maintenance of the plant or project mentioned in sub-heading (i). The expression "for the maintenance of" cannot be ignored or diluted to mean goods merely essential for the project in a general sense. Graphic art films used for test working did not satisfy the statutory requirement of maintenance.

Conclusion: Graphic art films were not covered by Entry 84.66(ii), and the assessee's claim failed on that ground as well.

Issue (iii): whether the recommendation of the Director General, Technical Development had binding statutory effect.

Analysis: The recommendation was not accorded statutory force under the governing regulations. The scheme did not make such concurrence binding in the present situation, and therefore the administrative recommendation could not override the requirements of the Customs law and the project import regulations.

Conclusion: The recommendation of the Director General, Technical Development was not binding and could not support the assessee's claim.

Final Conclusion: The import claim for graphic art films was rejected under both invoked tariff routes, and the writ appeal filed by the Revenue succeeded while the assessee's appeal failed.

Ratio Decidendi: A tariff entry granting project import benefits must be construed strictly according to its text, and goods not falling within the enumerated categories or the specific maintenance requirement cannot be brought within the entry by liberal interpretation or by reference to non-statutory recommendations.

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