Central excise exemption for Chapter 85 goods cannot be denied by invoking project import conditions meant for customs imports.

Goods manufactured in India and classifiable under Chapter 85 could not be denied central excise exemption under Notification No. 6/2006-CE merely because the Revenue sought to apply Project Import Regulation, 1986 conditions linked to customs project imports under Chapter 98.01. The Tribunal applied its earlier decision in an identical dispute and held that the exemption could not be refused on the ground that the goods did not satisfy project import requirements applicable only to customs tariff treatment. The impugned order was set aside and the appeal was allowed with consequential relief.

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Issues: Whether the appellant was entitled to exemption under Notification No. 6/2006-CE dated 1.3.2006 for insulated wires and cables classified under Chapter 85, notwithstanding the Revenue's objection based on the Project Import Regulation, 1986 and the conditions attached to Notification No. 21/2002 dated 01.03.2002.

Analysis: The goods manufactured and supplied were classifiable under Chapter 85 of the Central Excise Tariff, while heading 98.01 exists only in the Customs Tariff. The denial of exemption was founded on the view that compliance with Project Import Regulation, 1986 was necessary because the benefit under Notification No. 21/2002 was linked to goods falling under Chapter 98.01. The Tribunal applied its earlier decision in an identical dispute and held that goods manufactured in India and classifiable under Chapter 85 cannot be denied exemption on the ground that they do not satisfy Project Import Regulation requirements applicable to customs project imports.

Conclusion: The appellant was entitled to the exemption under Notification No. 6/2006-CE dated 1.3.2006.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: An exemption under the central excise notification cannot be denied to goods classifiable under Chapter 85 merely because the Revenue seeks to apply conditions meant for customs project imports under Chapter 98.01 and the Project Import Regulation, 1986.

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