2003 (2) TMI 408 - AT - Central Excise

Summary

Issues involved: Interpretation of Notification No. 32/99-C.E. regarding extension of benefits based on increased installed capacity.

In the judgment, the Commissioner (Appeals) extended the benefit of Notification No. 32/99-C.E. to the respondents, noting the increase in installed capacity of their unit by 25.65%. The expansion in both spinning and processing sections was certified by relevant authorities and confirmed by the statutory auditor. The Commissioner referred to specific additions in machinery and equipment to support the claim of increased production capacity. Additionally, an instruction by the Commissioner of Central Excise, Shillong clarified that expansion in finished items areas, such as yarn and processed fabrics, could fulfill the requirement of increased installed capacity, even if there was no expansion in intermediary product stages like weaving.

The Revenue, in their appeal, argued that the weaving section, an integral part of the manufacturing process, did not witness an expansion in installed capacity. However, the Tribunal, citing a previous case, emphasized that overall increase of 25% in the manufacturing unit sufficed to meet the conditions of the notification. Since the Revenue did not contest the overall increase in the respondents' manufacturing unit, the lack of expansion in the weaving section did not disqualify the respondents from claiming the benefit of the notification. Consequently, the Tribunal found no merit in the Revenue's appeal and rejected it.