Project import rates applied to a replacement microprocessor imported before commercial production and before assessment finalisation.

Replacement of a defective microprocessor imported after partial commissioning of a plant, but before finalisation of the project import assessment and before commercial production, was held eligible for assessment at project import rates under Heading 98.01. The plant could not begin computerised operation without the microprocessor, and the assessment records showed that project import classification had not yet been finalised when the replacement was brought in. The conclusion also aligned with the stated position that replacement parts may qualify where the project has not entered commercial production and the original defective part is returned or destroyed. The Revenue's challenge failed.

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Issues: Whether replacement of a defective microprocessor imported after partial commissioning of the plant, but before finalisation of project import assessment and before commercial production, was eligible for assessment at project import rates under Heading 98.01.

Analysis: The plant had only undergone partial commissioning and its computerised operation could not commence without the microprocessor. The record showed that the project import assessments had not been finalised when the replacement was imported. The conference conclusion relied upon by the appellate authority also supported project rates for replacement parts where the project had not entered commercial production and the original defective part was to be returned or destroyed.

Conclusion: The replacement microprocessor was eligible for the project import benefit, and the Revenue's challenge failed.

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