Exemption from Excise duty under the Notification No 108/95 CE dated 28.8.95 - Central Excise - F.No. 101/7/2008-CX-3

F.No. 101/7/2008-CX-3 Government of Inida Ministry of Finance Department of Revenue Central Board of Excise and Customs Dated : June 12, 2008 Sub: Exemption from Excise duty under the Notification No 108/95 CE dated 28.8.95 I am directed to refer to Explanation 2 to notification No 108/95 CE dated 28.8.95, inserted vide notification No 13/2008 CE dated 01.3.2008, specifying that the benefit under the notification is available when the goods brought into the project are not withdrawn by the supplier or the contractor. 2. Representations have been received expressing doubts regarding the scope of the said Explanation to the notification. 3. The matter has been examined. The purpose of this notification is to enable the optimum utilization of funds provided by United Nations/ International Agencies. The exemption was meant to be applied only to goods procured with the project funds and actually used and consumed in the core activity of the project. In the case of equipments purchased by contractors independently, after completion of the project, the contractor re-allocates the equipment for other commercial use. Therefore, it is clarified that the exemption is meant only for the goods which become part of the project on permanent basis and not for the goods which are used by the contractors for execution of the project and after completion of the project, the goods remain with the contractors, being owners of such goods for further deployment in other projects. The amendment is purely clarificatory in nature and states the position that always meant to be. 4. All pending disputes may be resolved accordingly. All the state governments and other authorities who issue the essentiality certificate may be requested to ensure that the certificates are issued only for goods which satisfy the above discussed criterion. Dilip Goyal Under Secretary to the Govt of India.