Substantive exemption cannot be denied for a wrong notification reference in the district certificate covering intended project use.

Exemption under Notification No. 6/2006-C.E. was available for goods required for setting up a water treatment plant when the district authority's certificate covered the goods and their intended use, even if the certificate referred to the wrong notification number and was issued before clearance. The operative requirement was certification of use in the drinking water supply project, not perfect citation of the notification number. A mistaken reference in the certificate was treated as a minor defect that did not defeat the substantive exemption, so the duty demand, interest, and penalty were unsustainable.

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Issues: Whether exemption under Notification No. 6/2006-C.E. could be denied merely because the District Collector's certificate mentioned a wrong notification number and was issued before the date of clearance, though the goods were covered by the certificate and were intended for a water treatment plant in a drinking water supply project.

Analysis: The exemption notification granted duty-free clearance for goods required for setting up water treatment plants, subject to a certificate from the competent district authority. The certificate on record specifically covered the motors for the Krishna Drinking Water Supply Project and there was no dispute regarding the identity or intended use of the goods. The mention of Notification No. 3/2004 in the certificate was treated as a mistaken reference, and the earlier circular and the substantially similar earlier notification showed that the operative condition was certification of intended use, not perfect citation of the notification number. The misdescription was held to be a minor defect that could not defeat the substantive exemption.

Conclusion: The exemption could not be denied on the basis of the wrong notification number in the certificate, and the demand, interest, and penalty were unsustainable. The appeal was allowed in favour of the assessee.

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