Project import concession denied where machinery registered for Goa was diverted to Bombay, breaching the declared contract terms.

Project import concession under Heading 84.66 was linked to the declared project site and terms of registration under the Project Import (Registration of Contract) Regulations, 1965. Clause 3(a) required the importer to specify the location of the plant or project, and clause 3(c) required declarations on installation, design, capacity, and, for substantial expansion, the installed capacity and proposed additions. Because the machinery registered for installation at Goa was diverted to Bombay instead of being used at the registered project site, the contractual condition underlying registration was breached. The imported goods therefore lost eligibility for concessional treatment under Heading 84.66.

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Issues: Whether the benefit of project import concession under Heading 84.66 of the Customs Tariff Act, 1975 was admissible when the imported machinery, registered for installation at Goa for substantial expansion, was diverted to Bombay instead of being used at the registered project site.

Analysis: Clause 3(a) of the Project Import (Registration of Contract) Regulations, 1965 required the importer to specify the location of the plant or project, and clause 3(c) required declarations regarding installation, design, capacity, and, in the case of substantial expansion, the installed capacity and proposed additions. The registration was therefore tied to the declared project location and purpose. Since the machinery was admittedly diverted from Goa to Bombay, the condition on which the contract was registered was breached. The project import concession could not be claimed contrary to the registered contractual terms, and the imported goods ceased to qualify for the concessional treatment under Heading 84.66.

Conclusion: The machinery was not used for the registered project at Goa, so the concession under Heading 84.66 of the Customs Tariff Act, 1975 was not admissible and the denial of benefit was .

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