Project import benefit extends to free warranty replacements supplied under the original contract without separate registration.

Free replacement refractory material supplied under the warranty clause of an already registered project import contract was treated as part of the original project import arrangement, not as a fresh commercial import. As the replacement was supplied without charge in substitution of damaged material previously imported, separate registration of the replacement supply was unnecessary. The project import benefit could not be denied merely because the replacement goods were not separately registered, and the assessee was entitled to refund of the differential duty, if otherwise admissible in law.

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Issues: Whether free replacement refractory material supplied under the warranty clause of the original project import contract was entitled to the benefit of project import, so that separate registration of the replacement supply was not required and the differential duty was refundable.

Analysis: The original contract for the plant, machinery and allied materials had already been registered under the project import scheme. The disputed refractory material was not a fresh commercial supply but a free replacement made under the warranty clause of the original purchase order, for which no charge was raised. Since the replacement formed part of the original contractual arrangement and was supplied in substitution of damaged material previously imported, separate registration of the replacement supply was unnecessary. In these circumstances, the benefit of the project import assessment could not be denied merely because the replacement goods were not separately registered.

Conclusion: The free replacement goods were eligible for project import treatment and the assessee was entitled to refund of the differential duty, if otherwise admissible in law.

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