2019 (9) TMI 1371 - AT - Central Excise

Area Based Exemption - substantial expansion - benefit of N/N. 01/2010-CE dt. 06.02.2010 on 09.06.2015 - respondent undertook substantial expansion by way of increase by not less than 25% of the value of fixed capital investment in plant and machinery and have commercial production for such expansive capacity w.e.f. 22.08.2014 - HELD THAT - The respondent has undertaken substantial expansion by way of increase by not less than 25% of the value of fixed capital investment in plant and machinery for the purpose of expansion of capacity and have commercial production for such expansive capacity on or after 06.02.2010. The Notification simply provides that if unit is in existence before 06.02.2010 and have invested more than 25% in fixed capital and production as started after 06.02.2010, the assessee is entitled to avail the benefit of the said Notification - Admittedly, the respondent has complied with the condition of the said Notification, in that circumstance, there are no infirmity with the impugned order wherein the authorities below have hold that the expansion has taken after 06.02.2010 and commercial production has also started after 06.02.2010. Appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against the benefit of exemption under Notification No. 01/2010-CE
- Interpretation of substantial expansion criteria under the Notification

Analysis:
The case involves an appeal by the Revenue against the grant of exemption under Notification No. 01/2010-CE to the respondent, who is engaged in manufacturing LD, HM, and PP Packing Materials. The respondent claimed the benefit of the notification based on substantial expansion criteria, stating an increase of not less than 25% in fixed capital investment in plant and machinery and the commencement of commercial production after 06.02.2010. The Revenue argued that the respondent did not fulfill the expansion criteria as they obtained permission to purchase machinery before the specified date. The Tribunal analyzed the Notification's clause 8(b)(i), which requires substantial expansion and commencement of commercial production post-06.02.2010. The Tribunal found that the respondent met the conditions by increasing investment by over 25% and starting production after the specified date, making them eligible for the exemption.

Furthermore, the Tribunal referred to the case of Hemraj Gordhandas vs. Asst. Collector of C.E. & Cus - 1978, where the Supreme Court emphasized interpreting tax statutes based on clear language without room for intendment. The Tribunal concluded that since the respondent met the clear terms of the exemption notification, the benefit could not be denied based on any supposed intention of the exempting authority. Consequently, the Tribunal dismissed the Revenue's appeal, affirming the lower authorities' decision to grant the exemption to the respondent.