Project import classification does not bar reclassification or exemption where the goods otherwise qualify under the tariff.

Goods imported for a project and assessed under Heading 98.01 were not excluded from their proper tariff classification or from exemption under Notifications No. 154/86-Customs and 312/86-Customs. Heading 98.01 was treated as a facilitative project-import assessment mechanism, not a substantive bar to classification under the appropriate heading. In the absence of any express prohibition in the tariff, the project import regulations, or the notifications, the importer could seek re-assessment and claim the available exemption. Section 28 of the Customs Act, 1962 was noted as recognising the ability to question assessment and seek redetermination.

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Issues: Whether goods imported for a project and assessed under Heading 98.01 of the Customs Tariff Act, 1975 could still be reclassified under the appropriate tariff heading so as to claim exemption under Notification No. 154/86-Customs and Notification No. 312/86-Customs.

Analysis: Heading 98.01 was treated as a facilitative project-import mechanism intended to simplify assessment of diverse goods imported for substantial expansion projects. The fact that goods are assessed under that heading does not take them out of the tariff altogether or prevent them from being classifiable under their appropriate substantive headings. In the absence of any express prohibition in the tariff, the project import regulations, or the notifications themselves, an importer may seek re-assessment and claim the exemption otherwise available to the goods. Section 28 of the Customs Act, 1962 also recognises the ability to question assessment and seek re-determination.

Conclusion: The benefit of the exemption notifications was not barred merely because the goods had been cleared under Heading 98.01, and the departmental appeal was rejected.

Ratio Decidendi: Classification under a project-import heading meant only for assessment convenience does not exclude the goods from their proper tariff classification or from claiming an otherwise available exemption, unless a statute or notification expressly prohibits such reclassification.

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