2023 (10) TMI 992 - AT - Central Excise

Exemption on investment in investment in plant and machinery after 06.02.2010 under N/N. 01/2010-CE dated 06.02.2010. Denial of benefit on the ground that as per the conditions of the notification, the investment in plant and machinery ought to have been made after 06.02.2010 whereas in the instant case the appellant had made substantial expansion prior to 06.02.2010 except for generator which is added after 06.02.2010. HELD THAT - On analysing the provisions in serial no. 8(i) of the Notification it is found that the it talks of undertaking substantial expansion by way of increase of not less than 25% in the value of fixed capital investment in plant and machinery and having commenced commercial production from such expanded capacity on or after 6th day of February, 2010. It is found that the language of the notification is very clear and the only requirement of the notification is that in order to avail the benefit of exemption is that the unit should have commenced commercial production from such expanded capacity on or after 06.02.2010 by investing 25% or more. In the present case, the appellant has produced the certificate issue of the director industries Centre Anantnag vide letter No. DICA/DEV of 2013/273 whereby they have certified the date of commencement of commercial production from substantial expansion as 12.11.2012. Further, there is a difference between the condition prescribed in serial no. (i) and Serial No. (ii). The department cannot import condition prescribed in another serial no. (ii) to deny the exemption to the appellant which was not present in serial no. (i) under which the appellant had availed the benefit. Further, it is found that the investment made by the appellant after 31.03.2004 is to the tune of 29.24% as certified by the Chartered Accountant in the certificate dated 31.03.2017 which is on record. The appellant is entitled to the benefit of exemption Notification No. 01/10-CE and denial of the same by the Commissioner (Appeals) is set aside - Appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are the eligibility of the appellant for the benefit of exemption under Notification No. 01/2010-CE dated 06.02.2010 based on the conditions specified in the notification.

Issue 1: Eligibility for exemption under Notification No. 01/2010-CE

The appellant, having a manufacturing unit in Jammu & Kashmir, applied for exemption under Notification No. 01/2010-CE for substantial expansion of their manufacturing unit. The Commissioner (Appeals) accepted the Revenue's appeal, contending that the appellant was not eligible for the exemption as the investment in plant and machinery should have been made after 06.02.2010, except for a generator added post that date. The appellant argued that the commercial production from the expanded capacity had commenced after 06.02.2010, fulfilling the condition of the notification. The appellant further contended that the Commissioner (Appeals) erred in considering the value of machinery as on a date prior to the commencement of commercial production from the expansion. The appellant also highlighted the difference in conditions between serial no. (i) and (ii) of the notification, emphasizing that the conditions for availing the exemption were met under serial no. (i).

Decision and Reasoning:

After considering the submissions and perusing the record, the Tribunal analyzed the relevant portion of the notification. It was observed that the notification required substantial expansion by investing not less than 25% in plant and machinery, with commercial production commencing after 06.02.2010. The Tribunal noted that the appellant had produced a certificate certifying the date of commencement of commercial production from the expansion. The Tribunal emphasized that the conditions of serial no. (ii) could not be imported to deny the appellant's exemption under serial no. (i). The Tribunal also noted that the investment made by the appellant post-31.03.2004 was 29.24% of the initial investment, as certified by a Chartered Accountant. Therefore, the Tribunal held that the appellant was entitled to the benefit of the exemption under Notification No. 01/2010-CE, setting aside the Commissioner (Appeals) order and allowing the appeal of the appellant with consequential relief.

(Order pronounced in the open court on 20.10.2023)