2004 (2) TMI 191 - AT - Central Excise

Summary

Issues:
Appeal against denial of benefit under Notification Nos. 32/99-C.E. and 33/99-C.E. for substantial expansion by the appellant company, M/s. Assam Petrochemicals Ltd.

Detailed Analysis:

1. Background and Procedural History:
The appeal was filed by M/s. Assam Petrochemicals Ltd. against the Order-in-Appeal denying their claim under Notification Nos. 32/99-C.E. and 33/99-C.E. The issue was initially decided by the Assistant Commissioner, then by the Commissioner (Appeals) in favor of the appellants. However, the Department appealed to the Tribunal, which remanded the case for de novo adjudication. Subsequently, the Assistant Commissioner ruled against the appellants, leading to the current appeal.

2. Appellants' Submissions:
The appellants argued that they undertook an expansion scheme in 1997, increasing their annual capacity and starting commercial production on 16-2-1998. They claimed eligibility for benefits under the Notifications due to the capacity increase and the commencement of commercial production. They emphasized that the Notifications aimed to promote industrialization and development in the North-East region.

3. Assistant Commissioner's Denial:
The Assistant Commissioner denied the appellants' claim based on various grounds, including the dates of commissioning and commercial production of different units, the applicability of commercial production criteria to existing units, and the percentage increase in installed capacity not meeting the required threshold.

4. Clarifications and Certificates:
The appellants presented a certificate from the Directorate of Industries certifying the date of commercial production as 16-2-1998. The Central Board of Excise and Customs issued clarifications regarding the criteria for exemption under the Notifications, emphasizing the importance of location and capacity increase dates.

5. Tribunal's Decision:
After examining the Notifications and CBEC's clarifications, the Tribunal found no ambiguity in the language. It clarified that the date of capacity enhancement is crucial for existing units, while the date of commercial production is relevant for new units. The Tribunal agreed with the Commissioner (Appeals) that Clause 4 of the Notifications pertained to new units only. As the appellants' expansion was completed before 24-12-1997, the appeal was rejected, upholding the Commissioner (Appeals) decision.

In conclusion, the Tribunal upheld the denial of benefits under the Notifications to M/s. Assam Petrochemicals Ltd. due to the completion of their expansion before the specified date, emphasizing the clarity of the relevant provisions and the distinction between new and existing industrial units.