Per C.N.B. Nair:

The issue that arises for decision in this appeal is whether the ACSR Aluminium Conductors supplied by the appellants to Asian Development Bank financed project in Karnataka for Power Efficiency Project were eligible for exemption under Notification No. 108/95. It is a requirement under the Notification that the manufacturer produces a certificate from the International Organisation that the said goods are to be supplied to a Project financed by the International Organisation and the said project had been duly approved by the Govt. of India. The exemption has been denied in the present case on the ground that the appellant assessee failed to produce certificate issued by M/s. Asian Development Bank or to show any evidence that the certificate they produced from the Project Engineer is a body authorized by the Asian Development Bank to issue a certificate as required under Notification No. 108/95. The appellants have submitted that the Power Efficiency Project was financed by the Asian Development Bank and they have already produced certificate from the Project Authorities and in terms of the standard procedure for issue of certificates in respect of projects financed by International Organisations, the certificate is to be issued only by the project authorities and that International Organisations do not directly issue certificates. It is their prayer, therefore, that the certificate issued by the project authorities be accepted as meeting the requirement of the Notification. They have also relied on the decision of this Tribunal in the case of similar case, namely, M/s. Nestor Pharmaceuticals Ltd. Vs. Commissioner of Central Excise, Delhi in support of their contention that the duty exemption should not be denied merely on the ground that certificate is not from the International Organisation. They have also relied on the dictum of the Supreme Court in Jain Engineering Company Vs. CCE 1987 (32) ELT 3 (S.C.) wherein the Supreme Court held that "when the intention is clear and manifest it will be unreasonably to take a narrow view of the Notification and not to extent its benefits."

2. As against the aforesaid submissions on behalf of the appellants, the learned DR has pointed out that "a certificate from the United Nations or an International Organisation" is a requirement under the Notification and since certificates produced are not from the same agency, the appellant would not be eligible for the exemption.

3. It is clear from a perusal of the records and submissions of both sides that there is no dispute that the supply of ACSR Conductors in question was for a Project which had been financed by ADB and on that score the supply was eligible to the exemption. The limited dispute is whether the certificate should have been issued by ADB itself. In this connection, the appellants have explained that it is standard procedure that Certificates shall be issued by the Project Authorities in such case. In the present case such certificates issued by the Project Authorities are already on record. It would be unreasonable to reject an eligibility certificate issued by a duly authorized person and approved by the Government of India. It would amount to defeating the purpose of the Notification. The Notification was specifically issued to reduce the cost of Projects financed by International Institutions. Sticking to the letter of the Notification and denying the exemption is contrary to the policy of the Notification. Such a view goes against the dictum of the Supreme Court in Jain Engineering Co. case and the decision of the Tribunal in Nestor Pharmaceuticals Ltd. case.

4. Accordingly, the appeal is allowed with consequential relief if any, to the appellant after setting aside the impugned order.