Exemption notifications operate on their own terms; Foreign Trade Policy conditions cannot be imported to deny interim relief.

An exemption notification must be applied according to its own stated conditions, and ancillary Foreign Trade Policy requirements cannot be imported unless expressly incorporated. In this matter, goods supplied for a mega power project were linked to the exemption structure, and the Revenue did not dispute compliance with the notification's express conditions. On that basis, a prima facie case was found for interim relief, so waiver of pre-deposit and stay of recovery were granted pending appeal. Denial of exemption solely because the manufacturer did not itself participate in International Competitive Bidding was not justified on the material before the Tribunal.

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Issues: (i) Whether the appellants had made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of the demand confirmed against them; (ii) whether exemption under Notification No. 6/2006-C.E. could be denied on the ground that the appellants did not themselves participate in International Competitive Bidding or satisfy Foreign Trade Policy conditions.

Issue (i): Whether the appellants had made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of the demand confirmed against them.

Analysis: The goods were supplied for a mega power project and the record showed reliance on the exemption structure linking Notification No. 6/2006-C.E. with the customs exemption available for imports for the same project. The Revenue did not dispute fulfilment of the conditions specifically stated in the exemption notification. In these circumstances, the Tribunal found a prima facie case for interim relief.

Conclusion: The appellants were entitled to waiver of pre-deposit and stay of collection of dues during pendency of the appeal.

Issue (ii): Whether exemption under Notification No. 6/2006-C.E. could be denied on the ground that the appellants did not themselves participate in International Competitive Bidding or satisfy Foreign Trade Policy conditions.

Analysis: The exemption notification was held to operate on its own terms and not to import the deeming-export conditions of the Foreign Trade Policy unless those conditions were expressly incorporated. The Tribunal noted that the customs exemption for the project and the excise exemption for local procurement were connected to the project requirement, and that denial solely because the manufacturer did not participate in International Competitive Bidding was not justified on the material before it.

Conclusion: Exemption could not be denied on the stated grounds at the interim stage.

Final Conclusion: Interim protection was granted because the appellants showed a prima facie entitlement to the exemption and the recovery proceedings were stayed pending disposal of the appeal.

Ratio Decidendi: An exemption notification must be applied according to its own conditions, and where those conditions are not shown to be violated, ancillary Foreign Trade Policy requirements cannot be imported to deny interim relief.

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