Exemption eligibility under customs notification fails where the project financier is not a qualifying international organisation.

Imported petroleum bitumen was held ineligible for exemption under Notification No. 84/97-Cus because the financing agency, JBIC, did not qualify as an "international organisation" within the notification read with the UN (Privileges and Immunities) Act, 1947. The project certification and the importer's bona fide belief could not cure the statutory defect in eligibility, so the exemption claim failed. Because the assessments had been kept provisional on product verification and exemption entitlement, the authorities were entitled to finalise the assessment on the clarified facts and demand the correct duty. The earlier certificate did not prevent final duty recovery.

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Issues: Whether the imported Petroleum Bitumen was entitled to exemption under Notification No. 84/97-Cus dated 11.11.1997, and whether the duty demand could be sustained when the assessments had been kept provisional.

Analysis: The exemption notification required that the project be financed by a qualifying international organisation and that the competent authority certify the project accordingly. The funding agency, JBIC, was found not to fall within the definition of "international organisation" under the notification, read with Section 3 of the United Nations (Privileges and Immunities) Act, 1947. The assessments had been kept provisional on the questions of product verification and entitlement to exemption. Once the factual position regarding JBIC was clarified before finalisation, the provisional assessment could be completed by demanding the correct duty. The existence of an earlier certificate and the importer's bona fide belief did not alter the statutory ineligibility to the exemption.

Conclusion: The exemption claim was rejected and the duty demand on finalisation of the provisional assessment was upheld against the assessee.

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