Restriction of Modvat credit on goods imported under Project Imports (Classified under Heading 98.01 of the Customs Tariff Act reg.

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.... I am directed to say that representations have been received by the Board that in some Commissionerates, the credit of Additional Duty of Customs paid on the goods (other than Capital Goods) classified under Heading 98.01 of the Customs Tariff imported under Project Import Regulations, 1986 has been restricted to 75% on the ground that Rule 57Q(3) restricts the admissible credit in such cases to....

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....tting up the project, but also to sub-contractors who have been engaged to provide machinery, equipment etc. for such projects Such sub-contractors are allowed to import raw materials, components, materials etc. required by them for the manufactured of the machinery, etc. at the same rates as are applicable to the project under heading no. 9801. It is evident, therefore, than imports under heading....

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....dit under Rule 57A or 57B. Hence, the provisions of Section AAAA of Chapter V of the Central Excise Rules, 1944 governing the Modvat on capital goods would not apply in respect of the Modvat on inputs, and vice versa. Thus, the restriction of 75% in respect of credit of additional duty paid on goods imported under Project Imports, classified under heading 98.01 of the Schedule to the Customs Tarif....