2007 (3) TMI 630 - AT - Central Excise

Summary

Issues involved: Duty demand due to denial of exemption under Notification No. 50/03 u/s substantial expansion criteria.

Summary:
The appellant claimed an increase in production capacity from 4 MT to 5.8 MT, supported by certificates from the General Manager of District Industries Centre and a Chartered Engineer, along with bills for equipment purchase. However, the order denied the exemption citing various discrepancies and non-compliance allegations.

The order highlighted that the party failed to install additional machinery as per Board's Circular, the claimed expansion was not substantial as per Tribunal's precedent, discrepancies in documentation were found, and no enhancement in electrical power load was observed. The defense argued that the notification only required a 25% increase in installed capacity, emphasizing the primacy of capacity increase under the circular.

Regarding the certificates provided, doubts were raised about their authenticity and the lack of proper verification and scientific calculation of the installed capacity. The revenue also consulted another Chartered Engineer, Shri D.K. Jain, who confirmed the capacity expansion to 5.8 MT based on production capacity formula, supported by the General Manager's certification.

Ultimately, the Tribunal found that the Commissioner's conclusion of no capacity expansion was unsustainable, and stay applications were allowed with recovery proceedings stayed pending appeal disposal.