Project exemption under Notification 108/95-C.E. covers chassis supplied for approved projects when certification is obtained and goods are not withdrawn.

Exemption under Notification No. 108/95-C.E. applies to chassis supplied for execution of approved projects funded by international organizations when the prescribed certificate from the Project Implementing Authority is obtained. Explanation 2 is only a clarificatory safeguard that goods brought into the project should not be withdrawn during the project period; it does not require the goods to become a permanent part of the project or be consumed in it. A departmental circular cannot add conditions not found in the notification or narrow its scope. On this construction, supply to contractors executing the project satisfies the exemption requirements and denial of the benefit is unsustainable.

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Issues: Whether the appellant was entitled to exemption under Notification No. 108/95-C.E. for chassis supplied to projects funded by international organizations, and whether Explanation 2 and the departmental circular could be construed to deny the exemption on the ground that the goods were not permanently incorporated in the project.

Analysis: The conditions of the notification were satisfied when the goods were supplied for execution of approved projects and the prescribed certificate from the Project Implementing Authority was obtained. Explanation 2 only clarifies that goods brought into the project should not be withdrawn during the currency of the project; it does not restrict the exemption to goods that become a permanent part of the project or are consumed in the project. The departmental circular could not add words to the notification or narrow its scope beyond the text of the exemption. The interpretation adopted by the department was inconsistent with the settled view that supply to contractors executing the project answers the notification requirement.

Conclusion: The appellant was eligible for the exemption, and the denial of benefit was unsustainable.

Ratio Decidendi: A clarificatory explanation to an exemption notification cannot be read to restrict the exemption beyond its main terms, and goods supplied for execution of an approved project remain eligible if the prescribed certification is fulfilled and the goods are not withdrawn during the project period.

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