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1981 (1) TMI 78 - HC - Central ExciseCapital investment made on plant and machinery installed in an industrial unit - Industrial unit
Issues:
Interpretation of the term "industrial unit" in a notification u/s Rule 8 of the Central Excise Rules, 1944. Summary: The petition sought clarification on the meaning of "industrial unit" in a notification exempting certain goods from excise duty. The petitioners, who manufactured varnishes in a separate building within their factory, claimed the exemption. The Assistant Collector rejected their claim, stating that the entire factory complex was one industrial unit. The High Court referred to dictionary definitions of "unit" and "industrial" to determine that the building exclusively used for varnish production qualified as an industrial unit. Consequently, the court set aside the Assistant Collector's order and directed refunds for excess duty paid. The court emphasized the distinction between "factory" and "industrial unit" in the notification, indicating that they were intended to have different meanings. The term "unit" was defined as a separate part of a complex whole, while "industrial" referred to industry-related activities. Applying these definitions, the building dedicated to varnish manufacturing was deemed an industrial unit. The Assistant Collector's decision was challenged based on the interpretation of "industrial unit." The court relied on dictionary definitions to establish that the building where varnishes were produced constituted a distinct industrial unit within the factory complex. Consequently, the petitioners were deemed eligible for the exemption under the notification. The court directed the authorities to refund the excess duty paid by the petitioners and set aside the Assistant Collector's order, recognizing the building used exclusively for varnish production as a separate industrial unit. The judgment highlighted the importance of interpreting legal terms in accordance with their defined meanings to uphold the petitioners' entitlement to the exemption.
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