Exemption eligibility for project supplies failed where the financing body was not shown to be an international organisation.

Exemption under Notification No. 108/95-C.E. was available only where the financing body qualified as an international organisation for the purpose of the notification, read with the declaration contemplated under the United Nations Privileges and Immunities Act. The record did not establish that the Japan Bank of International Co-operation satisfied that description, and the certificate relied on could not cure the statutory ineligibility. Full exemption and total waiver of duty and penalty were therefore not justified. The record nevertheless supported limited interim relief, so the appellant was directed to make a restricted pre-deposit while the balance duty and penalty remained in abeyance.

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Issues: Whether the appellant was entitled to the benefit of Notification No. 108/95-C.E. for supplies made to a joint venture project financed by the Japan Bank of International Co-operation, and whether full dispensation of duty and penalty was warranted.

Analysis: The relevant exemption was available only if the financing body answered the description of an international organisation within the meaning of the notification, read with the declaration contemplated under Section 3 of the United Nations Privileges and Immunities Act, 1947. The material placed on record did not establish that the Japan Bank of International Co-operation was such an international organisation. The certificate relied upon could not cure this statutory ineligibility. On that basis, complete waiver of the duty and penalty was not justified. At the same time, the record supported partial relief by directing a limited deposit and keeping the remainder in abeyance.

Conclusion: The appellant was not entitled to full exemption or total dispensation, but was granted partial relief on terms by requiring a deposit of Rs. 7 lakhs and dispensing with the balance duty and penalty.

Final Conclusion: The order granted only limited interim relief and denied full exemption, leaving the appellant with a restricted pre-deposit obligation and suspension of the balance demand.

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