Exemption under Central Excise Notification 108/95 applies when the project-specific conditions match the approved implementation arrangement.

An exemption under Central Excise Notification No. 108/95 applies according to the project arrangement specified in the notification. Where the project is approved by the Government of India for implementation by a State Government or Union Territory, the relevant condition is the one governing that category, and a certificate confirming approval and requirement of goods for project execution satisfies that clause. On that basis, the exemption conditions were met and denial of exemption was unsustainable. Once the exemption was available, the duty demand and penalty could not survive.

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Issues: Whether the appellant satisfied the conditions for exemption from Central Excise duty under Notification No. 108/95 dated 28.08.1996 in respect of supplies made for a project approved by the Government of India for implementation by the State Government.

Analysis: The notification contained distinct requirements depending on the nature of the project. Condition C(i) applied where the project was implemented by the Central Government, while condition C(ii) applied where the project had been approved by the Government of India for implementation by a State Government or Union Territory. The certificate on record showed that the project was approved by the Government of India for implementation by the Government of Madhya Pradesh through its implementing agency, and it certified the requirement of the goods for execution of the project. On that basis, the mandatory requirements under the applicable clause were satisfied.

Conclusion: The appellant was entitled to exemption under Notification No. 108/95, and the denial of exemption was unsustainable.

Final Conclusion: The demand and penalty could not survive once the exemption conditions were found to be fulfilled, and the appeal succeeded.

Ratio Decidendi: Where an exemption notification prescribes alternative conditions for different categories of projects, satisfaction of the condition applicable to the actual project arrangement is sufficient to claim the exemption.

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