Beneficial exemption notification cannot be denied where project supply condition is satisfied despite delivery to executing agency.

A beneficial exemption notification was applied to diesel generating sets supplied for a project, and the exemption was allowed because the decisive requirement was that the goods be supplied towards a financed and approved project. The fact that delivery was made to the executing agency rather than directly to the project implementing authority did not defeat the exemption, since the supply certificate and later confirmation established that the goods were in fact supplied for and installed in the project. A restrictive condition not found in the notification could not be read into it, so the Revenue's objection failed and the demand was unsustainable.

---

---

Issues: Whether the assessee was entitled to exemption under Notification No. 108/95-CE for diesel generating sets supplied for the project, despite the goods being delivered to the executing agency rather than directly to the project implementing authority.

Analysis: The exemption notification was held to be a beneficial notification issued in public interest. The decisive requirement was that the goods must be supplied towards a project financed and approved as contemplated by the notification. On the facts, the supply certificate and subsequent confirmation showed that the goods had been supplied for the project and installed in the work. The absence of direct delivery to the project implementing authority was held not to defeat the exemption when the project condition was otherwise satisfied.

Conclusion: The assessee was entitled to the benefit of the exemption notification and the Revenue's objection to the exemption failed.

Final Conclusion: The demand could not be sustained, and the assessee succeeded on the exemption issue.

Ratio Decidendi: Where the substantive conditions of a beneficial exemption notification are satisfied, the exemption cannot be denied by importing a restrictive requirement not found in the notification itself.

---