Project import benefit requires a registered contract and proper industrial and factory status before concessional assessment applies.

Project import benefit under Heading 84.66 required imports to be made against a specific contract duly registered with Customs, and the order, acceptance, pro forma invoice and letter of credit were insufficient substitutes. The contractual condition was treated as substantive, so failure to establish a registered contract defeated concessional assessment. The governing policy also required the unit to be recognised as an industry by the competent authority and registered as a factory under the Factories Act; a certificate issued for import control did not satisfy industrial recognition, and proposed post-installation factory registration was inadequate. The project import concession was therefore unavailable.

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Issues: (i) Whether the imported goods were eligible for project import benefit under Heading 84.66 in the absence of a formal contract registered with Customs; (ii) Whether the appellants satisfied the conditions of being an industry and a factory so as to qualify for project import treatment.

Issue (i): Whether the imported goods were eligible for project import benefit under Heading 84.66 in the absence of a formal contract registered with Customs.

Analysis: The benefit under Heading 84.66 was available only where imports were made against a specific contract and the contract was duly registered. The documents relied upon by the appellants, namely the order, acceptance, pro forma invoice and letter of credit, were not accepted as a substitute for the formal contract contemplated by the tariff entry. The requirement of a contract was treated as a substantive condition for concessional assessment.

Conclusion: The appellants did not establish compliance with the contractual requirement, and the claim to project import benefit failed on this ground.

Issue (ii): Whether the appellants satisfied the conditions of being an industry and a factory so as to qualify for project import treatment.

Analysis: The governing policy and the cited judicial ruling required, for film processing and related equipment, that the unit be recognised as an industry by the competent industrial authority and be registered as a factory under the Factories Act. The certificate from NFDC was only for import control purposes and did not amount to industrial recognition by the competent authority. The project report also showed that factory registration was to be undertaken after erection of the machinery, which meant that the unit was not yet a registered factory at the time of import.

Conclusion: The appellants failed to satisfy the necessary industrial recognition and factory registration conditions, and were therefore not entitled to project import benefit.

Final Conclusion: The impugned orders were sustained, and the appeals failed because the statutory and policy conditions for project import concession were not fulfilled.

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