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TMI Blog2010 (4) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.01.2003, relied upon by the learned counsel for the appellant, cannot lead to the conclusion, that any impression could have been gathered by the appellant, that "substantial expansion" envisaged by the policy would be relevant to any expansion carried out prior to 07.01.2003. In view of the above, we have no hesitation to conclude, that the appellant cannot claim any benefit under the industrial policy issued by the Government. - 12 of 2009 - - - Dated:- 9-4-2010 - J.S. Khehar, B.C. Kandpal, JJ. Mr. J.J. Munir, Advocate for the appellant. Mr. H.M. Bhatia and Mr. S.K. Mishra, Advocates for the respondent . J.S. KHEHAR, C. J. The controversy in the instant central excise appeal revolves around exemption claimed by the appellant under notifications bearing Nos. 49/2003-Central Excise and 50/2003-Central Excise, both dated 10.06.2003. The aforesaid two notifications are similarly worded. Relevant extract thereof (for adjudication of the present controversy) is being extracted hereunder: "In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he controversy prior thereto, had found the appellant ineligible for exemption for any other reason whatsoever. It is, therefore, submitted by way of inference, that the nature of the unit, as also the nature of its produce, fall within the scope of the exemption envisaged by the notifications bearing Nos. 49/2003-Central Excise and 50/2003-Central Excise, dated 10.06.2003. 4. So far as the issue of expansion of the existing installed capacity is concerned, learned counsel for the appellant invited the Court's attention to a communication dated 13.12.2002, addressed by the appellant to the Superintendent, Central Excise and Customs, Kashipur. Relevant extract of the aforesaid communication is being reproduced hereunder: "Sub: Intimation of shut down of plant Dear Sir, With reference to above subject, this is to bring your kind notice that our production is held up due to Major maintenance and Expansion of Plant from the Dt. 12.12.2002. We will be further informing you, when our production starts in our plant. This is for your information please. Kindly acknowledge the receipt of the same and oblige us. Thanking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the records of the appellant, as also after the inspection of the factory premises of the appellant, the Deputy Commissioner, Central Excise Division, Haldwani, arrived at the conclusion, that the expansion programme of the appellant, insofar as the factory premises under reference is concerned, had commenced prior to 07.01.2003. As such, the Deputy Commissioner, Central Excise Division, Haldwani, arrived at the conclusion, that the appellant was not entitled to any exemption. The appellant was, accordingly, required to pay duty amounting to Rs. 1,85,35,232/- for the period from 25.07.2003 to 31.05.2004, along with interest at the rate of 15 % per annum. The Deputy Commissioner, Central Excise Division, Haldwani, also required the appellant to pay central excise duty on the craft paper at the rate of 16% advance on all future clearances forthwith. 7. Dissatisfied with the order passed by the Deputy Commissioner, Central Excise Division, Haldwani, dated 15.06.2004, the appellant preferred an appeal before the Commissioner of Central Excise (Appeals-II), Meerut. The appeal preferred by the appellant was allowed on 10.08.2004. The appellate authority arrived at the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Central Excise, Meerut on 29.12.2003. In his statement, he acknowledged, that M/s Vishvakarma Paper and Boards Ltd. had contacted M/s Steamatic Resources on 10.07.2002 for getting a 12 ton boiler installed and commissioned at their factory premises. The representative of M/s Steamatic Resources, accordingly, visited the premises of M/s Vishvakarma Paper and Boards Ltd. on 11.07.2002, whereupon, a contract was executed for the installation and commissioning of the required boiler for a total consideration of Rs. 4 lacs, out of which, an amount of Rs. 50,000/- was received by way of advance. M/s Steamatic Resources started installation of the boiler under reference in the first week of November, 2002. By 18.12.2002, erection of pressure parts and components supplied by M/s Thermax Ltd. were duly installed. On 14.01.2003, the balance work was completed, and the boiler was duly commissioned. It was then handed over to M/s Vishvakarma Paper and Boards Ltd. When Sri Anuragh Kalia (aforementioned) was required to elaborate the details of works executed from 18.12.2002 to 14.01.2003, he responded by asserting, that during the aforesaid period, hydraulic test was undertaken, all ducting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellant in the instant appeal. 12. During the course of hearing, the first contention advanced by the learned counsel for the appellant was, that the words "have undertaken" used in notifications bearing Nos. 49/2003-Central Excise and 50/2003-Central Excise (both dated 10.06.2003) have to be given their true and correct meaning. According to the learned counsel for the appellant, the aforesaid words used in the notifications are relatable to the terms "begun" or "commenced". Insofar as the expression "have undertaken" is concerned, it is submitted that the requirement of the notifications for grant of exemption would be applicable to such undertakings / units, which may have begun or commenced expansion prior to 07.01.2003, but have concluded the same on or after 07.01.2003. It is, therefore, submitted that if the notifications bearing Nos. 49/2003-Central Excise and 50/2003-Central Excise, dated 10.06.2003 are read in their proper perspective contextually as well as holistically without loosing the purpose and intent with which the notifications had been issued, it would emerge, that since the completion of the expansion, by way of increase in installed capacity, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f increase in installed capacity by not less than 25% " on or after the 7th day of January, 2003 ". In other words, paragraph 2(b) notices the date 07.01.2003 twice over. In the first instance, with reference to the date on which an existing unit should have already been established, and in the second instance, with reference to the date when the expansion programme is undertaken. In case, the intention was not to further classify the words " have undertaken substantial expansion " with the words " on or after the 7th day of January, 2003 ", it would not have been essential to again mention the date 07.01.2003, as in the absence thereof, the meaning sought to be projected by the learned counsel for the appellant, would be deemed to have been fully and completely expressed. It is, therefore, not possible for us to accept that the words " on or after the 7th day of January, 2003 " should be overlooked. The reiteration of the date, 07.01.2003, was to clearly express the intention of the authorities, that the exemption would be granted to an industrial unit only if it had commenced its expansion programme after 07.01.2003. 15. There is yet another reason for not accepting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nit, like the appellant herein, who has commenced its expansion programme prior to 07.01.2003, to seek exemption from payment of central excise duty. 16. The second contention advanced by the learned counsel for the appellant was that the Tribunal had committed a manifest error in law in brushing aside the clarification given by the Board through para No. 2 of a circular dated 09.07.1999, interpreting an identically worded notification bearing No. 32/99-Central Excise dated 08.07.1999 to mean, that " increase in capacity should have been effective on or after 24.12.1997 ". Since the said clarification was in respect of an identically worded excise exemption notification, it is submitted that the same clarification should have been made applicable to the present notifications bearing Nos. 49/2003-Central Excise and 50/2003-Central Excise, dated 10.06.2003 as well. 17. We may rephrase the second submission of the learned counsel for the appellant. According to the learned counsel for the appellant, the clarification envisages that the expansion programme conceived of by the notification should be substituted so as to be applicable with reference to the actual / phys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion is, whether benefit under Notification 192 dated 11.6.1982 is to be understood only from the date on which this Notification came into force or for the entire period preceding that date which is conferred under Notification No. 132. We find significantly the language used in the second Notification is "For para 4, following paragraph shall be substituted". It is significant while substituting this paragraph 4 on the 11th June, 1982, it admits to confer rebate for the period preceding the date of this Notification viz. from May. So this Notification clearly indicates to confer benefit which is covered by the first Notification No. 132. If the interpretation as sought by the Revenue is to be accepted the preceding period has to be excluded. Substituted para 4 has two parts, first where production during three preceding years was nil and second part, the entire production during May to September, 1982 will be exempted. Appellant case is covered under both parts. Its production in the last three preceding years was nil and in terms of Notification 132 read with this substituted para 4, in terms of 2nd part the entire sugar produced during May to September, 1982 would exempt. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the controversy in the present case with that in Suprabhat Steel Ltd.'s case (supra), read out to us paragraph 2 of the aforesaid judgment, which is being extracted hereunder: "2. In these appeals, the Judgment of the Division Bench of Patna High Court in Civil Writ Jurisdiction Case Nos. 7063, 7068 and 7467 of 1994 and the other judgments following the same are under challenge. The short question for consideration is whether the Industrial Units which have started production prior to 1.4.93 and whose investment on plant and machinery do not exceed Rs. 15 Crores on 1.4.93 would be entitled to the facilities of sales tax exemption on the purchase of war material for a period of seven years from 1.4.93 in accordance with Clause 10.4(i)(b) of the Industrial Incentive Policy, 1993 (hereinafter referred to as 'the Industrial Policy') and whether the notification issued by the Government of Bihar dated 2nd of April, 1994 in exercise of power under Section 7 of the Bihar Finance Act to the extent it indicates "who has not availed of any facility or benefit under any Industrial Promotion Policy" is invalid as being contrary to the Policy Resolution of 1993. The High Court by the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articularly the Policy engrafted in Clause 10.4(i)(b). Consequently, the High Court was fully justified in striking down that part of the notification which is repugnant to sub-clause (b) of Clause 10.4(i) and we do not find any error committed by the High Court in striking down the said notification. We are not persuaded to accept the contention of Mr. Dwivedi that it would be open for the Government to issue a notification in exercise of power under Section 7 of the Bihar Finance Act, which may over-ride the incentive policy itself. In our considered opinion the expression "such conditions and restrictions as it may impose" in sub-section (3) of Section 7 of the Bihar Finance Act will not authorise the State Government to negate the incentives and benefits which any industrial unit would be otherwise entitled to under the general Policy Resolution itself. In this view of the matter, we see no illegality with the impugned judgment of the High Court in striking down a part of the notification dated 4th April, 1994."Based on the authoritative determined rendered by the Supreme Court in the aforesaid judgment, it is the submission of the learned counsel for the appellant, that the po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes, Export Processing Zones, Theme Parks (Food Processing Parks, Software Technology Parks, etc.) as stated in Annexure-I and other areas as notified from time to time by the Central Government, are entitled to: (a) 100% (hundred percent) outright excise duty exemption for a period of 10 years from the date of commencement of commercial production. (b) 100% income tax exemption, for initial period of five years and thereafter 30% for companies and 25% for other than companies for a further period of five years for the entire states of Uttaranchal and Himachal Pradesh from the date of commencement of commercial production. (II) All New industries in the notified location would be eligible for capital investment subsidy @ 15% of their investment in plant machinery, subject to a ceiling of Rs. 30 lakh. The existing units will also be entitled to this subsidy on their substantial expansion, as defined. (III) Thrust Sector Industries as mentioned in Annexure-II are entitled to similar concessions as mentioned in para 3(I) (II) above in the entire state of Uttaranchal and Himachal Pradesh without any area restrictions." Referring to parag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant, based on the Office Memorandum dated 07.01.2003 and the notification dated 08.01.2003, that the appellant, relying on the aforesaid, had commenced its programme of expansion so as to claim eligibility for the incentives proposed therein. Relying on the judgment rendered in Suprabhat Steel Ltd.'s case (supra), it is submitted, that having given the impression to existing industrial establishments, that incentives will be available on substantial expansion, and having defined the term "substantial expansion", the authorities were precluded from incorporating further conditions therein, so as to deprive the appellant the right to avail of the incentives incorporated therein. 22. We have given our thoughtful consideration to the last submission advanced by the learned counsel for the appellant as has been noticed in the foregoing paragraph. It is not possible for us to accept that the Office Memorandum dated 07.01.2003 resulted in the creation of any impression in the mind of the appellant, on the basis of which, it commenced the expansion programme of their existing industrial unit. In the Office Memorandum dated 07.01.2003, the words "as defined" appearing in conj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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