Project import classification denied for storage cylinders where an operating nitrogen gas plant was not being initially set up or substantially expanded.

Project import treatment under Heading 84.66 is limited to goods required for the initial setting-up of a unit or for the substantial expansion of an existing unit. Empty nitrogen gas cylinders imported to increase storage capacity of an already commissioned nitrogen gas plant did not satisfy that requirement because the unit was already operating and commercial production had begun. The claim that the cylinders were meant only to support gas supply to consumers was insufficient to show expansion of the unit itself. The supporting documents for contract registration were also found inadequate, so the goods were treated as ineligible for project import registration.

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Issues: Whether empty nitrogen gas cylinders imported for augmenting storage capacity of an already functioning nitrogen gas plant qualified for project import treatment and contract registration as goods required for the initial setting-up of a unit or for the substantial expansion of an existing unit.

Analysis: Project import classification under Heading No. 84.66 is confined to goods required for the initial setting-up of a unit or for the substantial expansion of an existing unit. The record showed that the nitrogen gas plant had already been set up and commercial production had commenced. The claim that the cylinders were meant only to increase storage capacity for supplying gas to consumers did not amount to expansion of the unit itself. The appellant also did not satisfactorily meet the objections regarding the supporting documents required for registration of the contract.

Conclusion: The goods were not eligible for project import registration, and the rejection by the lower authorities was upheld against the assessee.

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