Project supply exemption under Notification 108/95-C.E. extends to approved subcontracted supplies supported by prescribed certification.

Notification No. 108/95-C.E. exempts goods supplied to approved projects financed by the specified international agency when the prescribed Nodal Ministry certificate and approval papers are produced. On the facts discussed, a recognised sub-contractor in the BHEL-NTPC contract chain had project authority certification, Ministry of Power approval, and supporting funding documents, so the exemption was available. Denial on the basis of alleged non-proof of actual site delivery was not sustainable because that objection was outside the scope of the notice and the dispute framed.

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Issues: Whether exemption under Notification No. 108/95-C.E. was available to goods supplied as a sub-contractor for a project approved and financed through the prescribed international agency, and whether denial could be sustained on the ground that the certificate and proof of actual site delivery were insufficient.

Analysis: The notification exempted goods supplied to projects financed by the specified international organisation and approved by the Government of India, subject to production of the required certificate from the Nodal Ministry. The project in question was an approved project, the appellant was a recognised sub-contractor in the BHEL-NTPC contract chain, and the documents produced included the project authority certificate, approval from the Ministry of Power, and the relevant funding/approval papers. The objection that actual delivery at site had not been conclusively proved was not part of the dispute as framed in the notice, and the denial of exemption on that basis went beyond the scope of the proceedings.

Conclusion: The exemption could not be denied, and the goods cleared under the contract were entitled to the benefit of Notification No. 108/95-C.E.

Final Conclusion: The impugned order was unsustainable and the assessee was granted the exemption claim.

Ratio Decidendi: Where the requisite project approval and supporting certificate establish that supplies are made for an eligible approved project, exemption cannot be denied on an extraneous ground not forming part of the dispute or notice.

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