Project import exemption upheld on substantial compliance where alternate supplier amendment was sought before import and registration formalities followed.

Project import benefits and exemption under Notification No. 12/2012-Cus were held available where the contracts had already been registered, the sponsoring authority recommended registration for the alternate supplier, and the amendment was sought before import. The change of supplier was driven by business exigency, the CIF value was revised because the goods were airlifted, and Regulation 6 permitted amendment of the contract before or after registration. The refusal based on the amendment not being formally registered before import was treated as a pedantic objection, and substantial compliance with the statutory scheme was accepted. The matter was remanded for extension of the claimed benefits.

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Issues: Whether the appellant was entitled to the benefit of Project Import Regulations and the exemption under Notification No. 12/2012-Cus for goods sourced from an alternate supplier, despite the amendment to the contract and registration formalities being completed after import.

Analysis: The contracts for the project had already been registered under the Project Import Regulations, 1986, and the sponsoring authority had also recommended registration of the contract relating to the alternate supplier. The change of supplier was occasioned by business exigency, and the CIF value had to be amended because the goods were airlifted. The request for amendment and fresh registration was made before the goods were imported, and the amended sponsorship letter was subsequently filed. Regulation 6 permitted amendment of the contract before or after registration, and once the application was otherwise in order, the proper officer was required to make the note of amendment. The denial of benefit on the ground that the amendment was not registered before import was treated as a pedantic objection, and the appellant was held to have substantially complied with the statutory scheme. The principles governing exemption notifications were applied in the manner that eligibility must be strictly examined at the threshold, but once that is crossed, the notification may receive a liberal construction.

Conclusion: The appellant was entitled to the benefit of the Project Import Regulations and the exemption under Notification No. 12/2012-Cus, and the matter was directed to be remanded for extension of the claimed benefits.

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