how to craete exceptions for the password policy in windows 2003 server domain

you can't set password policy for each domain. every user just has one password.

You will need to implement a third party filter or write your own...
http://www.specopssoft.com/products/specopspasswordpolicy/

i need to do it thru group policy or active directory, any suggestions?

I will repeat my answer. It's not possible in Windows 2003 AD, not without suggested 3rd party tools. Let me explain why not. Default Domain Policy which defines password policies applies to DCs computer accounts. That's where users passwords are stored.

So either you use 3rd party solution or wait for Windows Server 2008 which will allow multiple password policies for users in one domain.

but i know that there many who did it thru group policy only and without any 3rd party software. i am pretty sure.thanks

Well, I hope that somebody that has sucessfully implemented multiple password policies for domain users in single domain without 3rd party tools answers your question. Of course I will be astonished if somebody comes up with such answer. In the mean time feel free to search EE database for similar previously answered questions, for example:
https://www.experts-exchange.com/questions/22689938/password-policy.html

Or:
https://www.experts-exchange.com/questions/21968450/Password-Policy.html

well,you were right at the end ..after many research i got to where u said..so thanks and u deserve the points

can't be done....

cannot be done