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Issues: Departmental appeal challenging order-in-appeal No. 268/88 reversing order-in-original regarding assessment of goods under Heading 98.01 of 1975 Tariff with Project Import Regulations, 1986.
Analysis: 1. The appeal contested the rejection of the respondent's claim for assessment of goods under Heading 98.01 and Project Import Regulations. The Asst. Collector initially rejected the claim, but the appellate authority reversed this decision, granting the respondent the benefit of concessional duty rate for project imports. 2. The respondent, operating a Cinematographic Laboratory, imported equipment from abroad under a registered contract to set up the laboratory. Later, the respondent imported spares for the equipment, seeking clearance under concessional duty rates. The Asst. Collector denied the claim, citing reasons such as the unit not being an industrial plant as per regulations and the spares not being related to the initial plant setup. The Collector (Appeals) disagreed, deeming the spares essential for plant maintenance and falling under Heading 98.01. 3. The eligibility for Regulation benefits is limited to units of "industrial plants" per Regulation 3(a), excluding service establishments like hotels, hospitals, etc. The exclusion clause's illustrative examples must not manufacture excisable products to qualify. The Cinematographic Laboratory, manufacturing excisable products, does not fit the exclusion clause, making it an industrial unit under Regulation 3(a). 4. The department argued that concessional duty benefits apply only to goods related to initial plant setup under Chapter Heading 98.01. The spares imported were deemed essential for the laboratory's maintenance and valued within the permissible limit, meeting the criteria for concessional duty under Chapter Heading 98.01. 5. Lastly, the department contended that the contract for spares import was not registered as required by Regulation 5. However, the Collector (Appeals) viewed it as a continuation of the original registered contract, possibly requiring registration under Regulation 6. The respondent claimed to have initiated the registration process, necessitating further verification. 6. Consequently, the order by the Collector (Appeals) was set aside, and the case remanded for the appellate authority to review after verifying the registration under Regulation 6. The appeal was allowed, granting the respondent the opportunity to substantiate the lawful filing of the application under Regulation 6.
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