Purposive exemption for project supplies under International Competitive Bidding cannot be denied for Indian manufacture or contractor routing.

Rule 6(6)(vii)(a) of the Cenvat Credit Rules, 2004 and the related exemption notifications were applied to project supplies made under International Competitive Bidding for the DMRC project. The Tribunal treated the undisputed DMRC and ABB Ltd. certificates as confirming the supply chain and held that the provision must be read purposively so that project-related exemptions are not denied merely because the goods were manufactured in India or routed through the executing contractor. On that basis, the demand, interest, and penalty were held unsustainable and the exemption benefit was allowed.

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Issues: Whether the appellant was entitled to the benefit of Rule 6(6)(vii)(a) of the Cenvat Credit Rules, 2004 and the exemption notifications for clearances made for a project supplied through an International Competitive Bidding contract.

Analysis: The goods were supplied to ABB Ltd. for use in the DMRC project under International Competitive Bidding, and certificates from DMRC and ABB Ltd. were on record and not disputed. The Tribunal applied the settled view that Rule 6(6)(vii) cannot be read in isolation to deny its benefit merely because the goods were manufactured in India. It further relied on the principle that a beneficial exemption notification meant for project supplies must be construed in a manner that advances the object of the exemption, and supply through the executing agency does not defeat eligibility.

Conclusion: The appellant was entitled to the benefit of Rule 6(6)(vii)(a) and the exemption notifications, and the demand, interest, and penalty were not sustainable.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Rule 6(6)(vii) of the Cenvat Credit Rules, 2004 must be applied in a purposive manner to project-related supplies under International Competitive Bidding, and exemption cannot be denied merely because the goods were manufactured in India or supplied through the executing contractor.

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