Project import registration cannot be denied for absence of a recommendatory letter or expansion-based description

A recommendatory letter from the sponsoring authority was not treated as a mandatory condition for registration of a project import contract under Heading 84.66. Rejection of registration solely for absence of that letter was therefore unsustainable. The Tribunal also noted that the project import concession was not defeated merely because the machinery was described as for substantial expansion rather than initial setting up, where the D.G.T.D. certification otherwise supported entitlement. In these circumstances, remand was found unnecessary and the assessee was held entitled to the consequential refund.

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Issues: Whether the absence of a recommendatory letter from the sponsoring authority justified rejection of registration of the project contract under Heading 84.66 of the Customs Tariff Act, 1975, and whether the matter required remand because the goods were described as for substantial expansion rather than initial setting up.

Analysis: The Tribunal followed its earlier decisions and held that production of a recommendatory letter from the D.G.T.D. was not a mandatory prerequisite for registration of a project import contract. Rejection of the application solely for want of that letter was therefore unsustainable. The Tribunal also found that the project import concession would be available whether the machinery was for substantial expansion or for initial setting up, as certified by the D.G.T.D., so the difference in description did not affect entitlement. In view of this, no useful purpose would be served by remanding the matter for further verification.

Conclusion: The rejection of registration was set aside, remand was declined, and the assessee was held entitled to consequential refund.

Final Conclusion: The appeal was allowed on the footing that the project import benefit could not be denied for absence of the recommendatory letter or for the stated nature of the expansion, and the consequential refund followed.

Ratio Decidendi: A recommendatory letter from the sponsoring authority is not a mandatory condition for registration of a project import contract where entitlement to the project import concession is otherwise established.

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