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Issues:
- Denial of benefit of project import on components and raw material for manufacturing special purpose wagons. - Interpretation of whether special purpose wagons qualify as auxiliary equipment for initial project setup. Analysis: The appellants appealed against the order-in-appeal by the Collector of Customs (Appeal), Bombay, which denied the benefit of project import on components and raw material for manufacturing special purpose wagons for transporting coal in a power project. The Asstt. Collector of Customs rejected the application for project import registration, stating that project import benefits cannot be extended to raw materials and components for manufacturing railway wagons used solely for coal transportation. The appeal was dismissed by the Collector of Appeals, Bombay. The appellants argued that the special purpose wagons are integral to the power project and should qualify for project import benefits. They emphasized that these wagons are specifically designed for coal transportation from mines to the thermal power station, permanently installed on rails within the project, and not suitable for general railway use. The appellants contended that since the revenue authority granted project import benefits for the rail line these wagons would run on, they should also be considered auxiliary equipment for the project setup. On the other hand, the respondent argued that the special purpose wagons were not auxiliary equipment for the initial project setup, citing precedents such as the Texmaco Ltd. case and the National Aluminium Co. Ltd. case. The respondent urged for the appeal's dismissal based on these precedents. The Tribunal examined the relevant Customs Tariff heading 98.01, defining auxiliary equipment as subsidiary equipment directly used in setting up a project. Referring to the Punjab State Electricity Board case, the Tribunal clarified the strict interpretation of auxiliary equipment, emphasizing direct utility in project setup. The Texmaco Ltd. case was cited to establish that railway wagons for transporting goods to a factory site are not considered auxiliary equipment for initial project setup. In the case details provided, involving the import of wheel sets for railway wagons, the Tribunal ruled that these wheel sets did not qualify as auxiliary equipment for project setup. Additionally, the National Aluminium Co. Ltd. case determined that the port facility conveying system did not fall under project import benefits. Ultimately, the Tribunal found no merit in the appeal, dismissing it based on the precedent set by the Texmaco Ltd. case. The judgment reaffirmed that the special purpose wagons for coal transportation did not meet the criteria for auxiliary equipment under project import regulations.
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