Distinct exemption entries must be applied by project character, not intended use, for imported captive power plant goods.

Exemption entries in a customs notification for distinct project categories must be applied according to the independent character of the imported goods. A diesel generating set imported for a fertiliser project was treated as goods required for a captive power plant, because the power plant was a separate and distinct project and not an integral part of the fertiliser plant. As a result, the more beneficial fertiliser-project exemption was unavailable, and the goods fell only within the captive power plant entry.

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Issues: Whether diesel generating set imported for use in a fertiliser plant was eligible for exemption under Entry 226(i) as goods required for a fertiliser project, or only under Entry 226(iii) as goods required for a captive power plant of 5 MW or more.

Analysis: Entry 226 of the notification provided distinct exemptions for different categories of projects. The power plant was found to be a separate and distinct project from the fertiliser plant, even though it was intended to supply power for the NPK project. The notification structure and the deliberate differentiation in duty treatment showed that the two entries were meant to operate separately. Since the imported goods were required for a captive power plant and not as an integral part of the fertiliser project, simultaneous entitlement under both entries was not available.

Conclusion: The exemption under Entry 226(i) was not available; the goods were to be treated as required for a captive power plant under Entry 226(iii), against the assessee.

Final Conclusion: The appeal failed because the imported power plant was held to be a separate project and the notification did not permit the assessee to claim the more beneficial fertiliser-project exemption.

Ratio Decidendi: Where exemption entries in a notification apply to distinct project categories, goods imported for a captive power plant used to support a fertiliser project are to be classified according to the independent character of the power plant and not treated as part of the fertiliser project for exemption purposes.

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