Exemption conditions cannot be enlarged by implication when supplies are made for a drinking water project and refund follows.

Exemption under Notification No. 6/02-C.E. was available for supplies made to a drinking water project because the notification did not require the supporting certificate to be produced before clearance or to stand in the supplier's name. The record showed that the goods were supplied on behalf of the project owner and that the District Collector's certificate existed in that name, so denial of exemption on additional conditions not found in the notification was unsustainable. Absence of unjust enrichment also supported consequential refund. The demand-based denial was set aside and refund followed.

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Issues: Whether the assessee was entitled to exemption under Notification No. 6/02-C.E. dated 1-3-2002 for supplies made for a drinking water project, and whether refund was consequentially admissible.

Analysis: The exemption notification did not prescribe that the requisite certificate must be produced before clearance of the goods or that it must stand in the name of the supplier. The record showed that the goods were supplied for the project on behalf of the project owner, and the necessary certificate from the District Collector existed in that name. In the circumstances, the denial of exemption on the basis of conditions not found in the notification was unsustainable. The authority also noted absence of unjust enrichment.

Conclusion: The assessee was entitled to the exemption, and the demand-based denial was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded, and consequential refund was directed.

Ratio Decidendi: Conditions for exemption cannot be enlarged by implication; where the notification does not require prior production of a certificate or insist that it be in the supplier's name, exemption cannot be denied on those grounds.

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