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TMI Blog1997 (1) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit of exemption/ deferment of sales tax. The application filed on January 23, 1991 was, however, rejected by the Higher Level Screening Committee in its meeting held on December 28, 1992 on the ground that the petitioner-company had purchased old machinery worth Rs. 14,00,000. An appeal was filed by the petitioner before the Secretary to the Government of Haryana, Industries Department, who was the appellate authority under clause (g) of sub-rule (5) of rule 28A of the Rules. The petitioner explained in the memo of appeal that additional investment made in the diversified unit was more than 25 per cent of the fixed capital investment of the existing unit and there was also an increase in the production of the unit by more than 25 per cent of the registered capacity of the existing unit. In appeal, the plea was examined and thereafter the appellate authority remanded the matter back to the Higher Level Screening Committee to decide the case afresh after giving opportunity of hearing to the petitioner, vide appellate order dated October 19, 1993. The case was, however, again rejected by the Higher Level Screening Committee solely on the ground that the diversified unit had purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustrial unit means a unit set up or installed during the operative period for the first time which creates additional productions/manufacturing facilities for manufacture of the same product/products as of the existing unit (expansion) or different products (diversification) and- (i) in which the additional fixed capital investment made at one time after 1st April, 1988 exceeds 25 per cent of the fixed capital investment of the existing unit; and (ii) which results into increase in annual production by 25 per cent of the licensed/registered capacity of the existing unit in case of expansion." 6.. Clause (c) was amended by notification dated November 15, 1991 whereby new industrial unit was allowed to purchase old machinery to the extent of 25 per cent of the total cost of the machinery by inserting the words "or when the cost of old machinery does not exceed 25 per cent of the total cost of machinery". The amended clause (c) of sub-rule (2) of rule 28A of the Rules reads as under: "(c) 'New industrial unit' means a unit which is or has been set up in the State of Haryana and comes or has come into commercial production for the first time during the operative period and has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of old machinery was totally prohibited under clause (c) of sub-rule (2) of rule 28A and, therefore, the diversified unit did not qualify to seek exemption. As has been seen in clause (c), it applied to a new industrial unit which was set up in the State of Haryana and which came into commercial production for the first time during the operative period. As per the said clause, the new industrial unit should not be formed as a result of purchase or transfer of old machinery except when the old machinery was received in the course of import into India. After November 15, 1991, an amendment was incorporated in clause (c) whereby old machinery was allowed to be acquired if its cost did not exceed 25 per cent of the total cost of machinery. The Higher Level Screening Committee as well as the appellate authority took the view that the petitionercompany had admittedly purchased old machinery worth Rs. 14,00,000 and, therefore, under clause (c) of sub-rule (2) of rule 28A of the Rules, the unit became ineligible or disqualified. 11.. Shri Rajesh Bindal, learned counsel for the petitioner, has argued that clause (c) of sub-rule (2) of rule 28A of the Rules specifically applied to a case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) have to be read together and the ban on the purchase of old machinery has to be made applicable to both the categories of industrial units, namely, new industrial units and diversified units. It is also contended that the benefit of amendment introduced on November 15, 1991 was not at all available because the petitioner had commenced commercial production in the diversified unit on November 28, 1990, i.e., prior to the date of amendment. The respondents have, therefore, defended the rejection of the petitioner's application seeking exemption from sales tax. 13.. From the facts of the case as emerging from the rival contentions, it is obvious that the petitioner sought exemption from sales tax while setting up a diversified industrial unit. As has already been seen, it was not a case of existing unit inasmuch as the petitioner did not claim any benefit for its plant producing starch and allied by-products. The benefit of exemption was sought for the diversified industrial unit only. It was, therefore, a case covered by clause (d) of sub-rule (2) of rule 28A and not by clause (c). As has been seen earlier, clause (c) was applicable to a new industrial unit. The petitioner's u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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