9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (2) TMI 397 - AT - Central ExciseArea based Exemption - Notification No.50/2003-CE dt. 10.06.2003 w.e.f. 09.01.2007 - Held that - there is nothing in the Notification No. 50/2003-CE to suggest that there should be an increase in each and every unit of the plant to qualify for exemption by the way of 25% enhancement of capacity of production and that when as per the opinion obtained by Revenue from Chartered Engineer, annual capacity of production has been enhanced by more than 25%, the benefit of exemption cannot be denied. Un-disputedly the respondent have installed additional equipment and machinery by making additional investment, as a result at which the capacity of production has increased about 65%, it would not be correct to deny the exemption on the ground that enhancement capacity of production is merely by processed improvement - Following decision in case of Uttaranchal Iron & Ispat Ltd.(2008 (5) TMI 91 - CESTAT NEW DELHI) and Hetikuli Tea Estate (2008 (5) TMI 177 - CESTAT KOLKATA) - Decided against Revenue.
Issues:
Capacity expansion for Central Excise duty exemption under Notification No.50/2003-CE. Analysis: Issue 1: Capacity Expansion Claim The appellant, a manufacturing unit, sought Central Excise duty exemption under Notification No.50/2003-CE due to an alleged capacity expansion exceeding 25%. The respondent claimed to have increased their manufacturing capacity supported by documents, including a letter certifying a 65% increase in capacity for Rosin and Turpentine Oil. The Range Officer confirmed the installation of additional machinery like Melting Tanks, Settling Tanks, and a Steam Boiler. However, the Revenue argued that the capacity expansion was due to process improvement, not additional machinery installation, as the Copper Kettle and discharge Kettle capacities remained the same. The Additional Commissioner initially denied the exemption, but the Commissioner (Appeals) reversed the decision, emphasizing the installation of new machinery. This led to the Revenue's appeal and the respondent's Cross Objection. Issue 2: Arguments The Revenue contended that the capacity of the distillation and discharge Kettles determined the plant's capacity, which had not changed, thus denying the exemption. They cited a precedent where modernization did not constitute substantial expansion. Conversely, the respondent defended the Commissioner (Appeals) decision, referencing a case that highlighted the 25% production capacity enhancement without a need for every unit's increase. They argued that the benefit should not be denied if the production capacity increased by over 25%, as confirmed by a Chartered Engineer. Issue 3: Tribunal's Decision The Tribunal examined the evidence and confirmed the installation of additional machinery, resulting in a 65% capacity increase, supported by increased power consumption and new equipment like Melting Tanks and a Steam Boiler. They noted that the capacity expansion was not solely due to process improvement, as the new machinery investments were substantial. Referring to precedents, the Tribunal upheld the Commissioner (Appeals) decision, dismissing the Revenue's appeal and disposing of the Cross Objection. The judgment emphasized that capacity increase through new machinery installation warranted the exemption, even if specific Kettle capacities remained unchanged. This detailed analysis of the judgment highlights the key issues, arguments, and the Tribunal's decision regarding the capacity expansion claim for Central Excise duty exemption under Notification No.50/2003-CE.
|
