Project import concession requires real expansion, not equipment added to fix existing plant deficiencies.

Project import concession under Heading 84.66 applies only where an import is for initial setting up or for substantial expansion of an existing unit. Substantial expansion means a real enlargement of the unit on a scale comparable to setting up a new unit, not a mere modification, replacement, or rectification of defects to achieve the output originally expected from existing plant and machinery. On the stated facts, the twin flow refiner was imported to correct deficiencies in the pulping plant and reach planned production, so it did not amount to substantial expansion and was not eligible for Project Imports treatment.

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Issues: Whether the import of a twin flow refiner qualified for the benefit of Project Imports under Heading 84.66 of the Customs Tariff Act, 1975 as goods required for the substantial expansion of an existing unit.

Analysis: The relevant test under Heading 84.66 is whether the import is for initial setting up of a unit or for substantial expansion of an existing unit. Substantial expansion denotes an expansion of the unit itself on a scale comparable to setting up a new unit, and not merely a modification intended to secure the output originally expected from existing plant and machinery. The facts showed that the refiner was imported to correct deficiencies in the existing pulping plant and to achieve the planned production level, rather than to bring about a genuine enlargement of the unit's installed capacity. Decisions where the Tribunal had allowed the concession were distinguished on their facts, while the authorities supporting denial of the concession were held applicable.

Conclusion: The import did not qualify as a substantial expansion of an existing unit and was not eligible for assessment under Heading 84.66 of the Customs Tariff Act, 1975. The benefit of Project Imports was denied.

Ratio Decidendi: For project import concession under Heading 84.66, substantial expansion must mean a real enlargement of the existing unit, comparable to the setting up of a new unit, and not a mere modification, replacement, or rectification of defects to achieve intended production from the existing installation.

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