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TMI Blog2010 (12) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... 10th June, 2003, a clarification was issued on 21st January, 2004. By the said clarification, the term 'substantial expansion', as used in the Notification dated 7th January, 2003, followed in the Notification dated 10th June, 2003, was clarified as follows : "(a) Increase in installed capacity of an existing unit by not less than 25% should be the result of installation of additional plant and machinery. Any increase in the installed capacity by means other than installation of additional plant and machinery would not qualify for the benefit of exemption under "substantial expansion". (b) As substantial expansion is defined in terms of increase in installed capacity by 25% or more, value of investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore it, went before the Tribunal. Tribunal noted, to which there appears to be no dispute, that the Commissioner of Excise determined the installed capacity of the respondent, under Section 3-A of the Central Excise Act (Compounded Levy Scheme), and that after the respondent made a claim that it has increased its installed capacity, the Surveyor engaged by the Excise Department found that the installed capacity of the respondent has been increased by more than 25% of its installed capacity. The Tribunal also noticed that the said Surveyor reported that in order to increase the capacity, respondent modified its existing furnace by increasing its length from 70 ft. to 120 ft. The Tribunal found that the earlier motor was replaced by a heavie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y should remain. What was held out was that something additional should be brought-in, in the form of plant and machinery, which may be secondhand, and by dint of which, capacity has been expanded. In the instant case, the length of the existing furnace was increased. The furnace, which was in existence, is not the furnace, which is now in existence. The furnace, which is now in existence, is an additional plant. It is true that the additional plant, in the form of furnace, is an old plant made to the specification by modification thereof, but there is no bar to that in the clarification Circular dated 21st January, 2004. The gearbox and the motor have been replaced. Those are additional machinery. The Circular nowhere says that such machin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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