2017 (7) TMI 390 - AT - Central Excise

Substantial increase in installed capacity - benefit of N/N. 56/2002-CE dated 14.11.2002 - The case of the Revenue is that as the respondent has invested the capital w.e.f. 03.04.2006, whereas on the said day, the labour employment was the same, as prior to 03.04.2006 and after 03.04.2006, therefore, they have not complied with the condition of the Notification - Held that - the understanding of the notification by the Revenue is mis-placed - the General Manager Distt. Industries Centre has issued certificate certifying that the labour has been increased more than 25% from the base labour employed, therefore, the Ld. Commissioner (A) has rightly allowed the benefit of exemption N/N. 56/2002-CE dated 14.11.2002 - Nowhere in the Notification, there is a condition that the salary bill/provident fund are required to be increased failing which, the assessee is not entitled for benefit of exemption N/N. 56/2002-CE dated 14.11.2002 - appeal dismissed - decided against Revenue.

Summary

Issues:
Interpretation of Notification No. 56/2002-CE dated 14.11.2002 regarding labor employment and capital investment for exemption.

Analysis:
The Revenue filed an appeal challenging the order granting the benefit of Notification No. 56/2002-CE dated 14.11.2002. The respondent had applied for the exemption by increasing labor employment and production capacity. The Revenue contended that the labor was not increased as required by the Notification, and the salary bill of the labor had decreased post-enhancement, thus disqualifying the respondent.

Upon review, it was found that the General Manager had certified the increase in labor from the base employment, as required by the Notification. The Revenue's argument that labor remained the same before and after capital investment was deemed misplaced. The Notification mandates an increase of more than 25% in labor from the base employment, which was certified by the General Manager. Therefore, the Commissioner's decision to grant the exemption was upheld.

Additionally, the Revenue argued that the decrease in the salary bill and provident fund contribution disqualified the respondent from the exemption. However, a thorough examination of the Notification revealed no such requirement. The contention regarding the salary bill and provident fund was dismissed as frivolous and not supported by the Notification.

Conclusively, the Tribunal found no fault in the Commissioner's decision to grant the exemption based on the valid certification of increased labor as per the Notification's requirement. The appeal by the Revenue was dismissed, affirming the lower authority's order.