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TMI Blog2014 (6) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... area based exemption to the existing industrial units which had earlier availed the area based exemption under the notification. Thus the existing Industrial units, after having availed area based exemption under the notification, are entitled to avail area based exemption, under the new notification, on fulfilment of required conditions of the new notification. Regarding admissibility of area based exemption to the appellants under the provisions of the new notification, find that the same is admissible to the existing industrial units provided they fulfill either of the one condition stipulated at para 8(b) of the new notification. As regards the condition of substantial expansion, by way of increase of not less than 25% in the value of fixed capital investment in plant and machinery, hold that the appellants have fulfilled the condition of substantial expansion, by way of increase of not less than 25% in the value of fixed capital investment in their plant & machinery, as such, they are eligible for area based exemption under the scheme of having undertaken substantial expansion by way of increase of over 25% in the value of fixed capital investment in plant & machinery, before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2919128 1930491 Total 2,94,00,384 1,79,43,260 1.1 As the issues involved in these appeals are same, therefore, these are being taken up together for disposal through this common order. 2. Briefly stated, the appellants, holding Central Excise Registration No. AAACF3272AXM001, for manufacture of Pesticides, Insecticides, Weedicides, Herbicides & Fungicides, falling under Chapter Heading No. 38 of the 1st Schedule to the Central Excise Tariff Act, 1985, had been availing the exemption under Notification No. 56/2002-C.E., dated 14-11-2002, as amended ('the notification' in short) upto 28-3-2013. Vide letter FIL:PD:EX-1392-93, dated 23-3-2013, the appellants informed the department that they have undertaken substantial expansion of their unit by increasing the installed capacity by 30%. The appellants requested for grant of area based exemption under Notification No. 01/2010-C.E., dated 6-2-2010 (in short 'the new notification') under the substantial expansion scheme and also claimed refund of duty, by way of self credit, paid through PLA, for the period from April, 2013 to December, 2013, under the new notification. On the substantial expansion and refund claims of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 (247) E.L.T. 512 (Tri.-Del.) & Punjab Paint Colour & Varnishes Works Pvt. Ltd. v. CCE, Kanpur [2007 (208) E.L.T. 85 (Tri.-Del.) = 2007 (5) S.T.R. 57 (T). (iii) That the substantial expansion, in terms of the new notification can take place either by way of increase by not less than 25% in the value of fixed capital investment in plant & machinery for the purpose of expansion of capacity or modernisation and diversification or by way of new investments which is directly attributable to generation of additional regular employment of not less than 25% above the base employment limit. (iv) That the new notification, only in the case of substantial expansion by way of investment leading to generation of additional regular employment provides for fulfillment of certain conditions including the production of a certificate from the General Manager of the concerned District Industries Centre. No such condition is required to be fulfilled for availing exemption on the ground of substantial expansion by way increase in value of fixed capital investment in plant and machinery. (v) That the impugned orders does not dispute the facts that the appellants undertook substantial expansion by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, 2014. The appellants requested that both their appeals and their stay applications may be disposed of together. The appellants, vide letter dated 5-5-2014, submitted copies of the following documents which they had promised to submit during the personal hearing. (i) Certificate of Fitness No. 12630 for power load of 200HP issued by Electrical Inspection Agency, Jammu. (ii) Certificate of Fitness No. 12631 for DG set of 250KVA issued by Electrical Inspection Agency, Jammu. (iii) Certificate of G.M., DIC, Jammu dated 14-3-2014 certifying date of production as 1-4-2013, under substantial expansion and investment during substantial expansion as ₹ 178.40 lacs in P&M and regular employees strength 59 before substantial expansion & 76 after substantial expansion. (iv) Employees Provident Fund returns of the unit from 1-4-2012 to 31-3-2014. 5. In their letter dated 5-5-2014, the appellants also submitted that the date of production, under substantial expansion has been authenticated as 1-4-2013 by G.M., DIC, Jammu which also certify increase in regular employees from 59 to 76 i.e. an overall increase of 28.8%, in view of which the impugned orders be set aside. Furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 6th day of February, 2010, and such new investment is directly attributable to the generation of additional regular employment of not less than twenty-five per cent over and above the base employment limit, subject to the conditions that, - (1) the unit shall not reduce regular employment after claiming exemption, and once such employment is reduced below one hundred and twenty-five per cent, of the base employment limit, such industrial unit shall be debarred from claiming the exemption contained in this notification in future : Provided that, the exemption availed by such industrial unit, prior to such reduction, shall not be recoverable from such industrial unit. (2) the manufacturer shall produce a certificate, from General Manager of the concerned District Industries Centre to the jurisdictional Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, to the effect that the unit has created such additional regular employment. Explanation. - for the purposes of this notification, - (a) "base employment limit" means maximum number of regular employees employed at any point of time, by the concerned indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification No. 1/2010-CE, dated 6-2-2010." 8.1 In view of the above discussions, I hold that the existing Industrial units, after having availed area based exemption under the notification, are entitled to avail area based exemption, under the new notification, on fulfilment of required conditions of the new notification. 9. Regarding admissibility of area based exemption to the appellants under the provisions of the new notification, I find that the same is admissible to the existing industrial units provided they fulfill either of the one condition stipulated at para 8(b) of the new notification, which is reproduced in para 7 above. 9.1 As regards the condition of substantial expansion, by way of increase of not less than 25% in the value of fixed capital investment in plant and machinery, I find that the adjudicating authority has rejected the appellants claim of having undertaken substantial expansion on the ground that neither date of production after substantial expansion has been granted nor %age increase of the installed capacity is certified by the competent authority. Further, there is no order of sanction of additional power load from the concerned elec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantial expansion, by way of increase of not less than 25% in the value of fixed capital investment in their plant & machinery, as such, they are eligible for area based exemption under the scheme of having undertaken substantial expansion by way of increase of over 25% in the value of fixed capital investment in plant & machinery, before the substantial expansion, in terms of the new notification. 10. As per para 8 of the new notification, area based exemption is also admissible to the existing units, which have made new investment which is directly attributable to the generation of additional regular employment of not less than 25% over and above the base employment limit. The expansion claim of the appellants has been disallowed on this score also by the adjudicating authority on the ground that the workforce of 59 and 75 before and after the substantial expansion is not certified by the Labour Commissioner or G.M., DIC, Jammu, as required under the new notification. On this point, I observe that in terms of para 8(b) of the new notification, the appellants are required to produce a certificate of G.M., DIC, Jammu certifying new investment and increase of over 25% in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants in accordance with para 2 of the new notification and convey the same to the appellants within 15 days of the receipt of this order. I also order that the refund over & above the admissible amount availed and utilized by the appellants, is liable for recovery along with interest. This would be read in conjunction with this order. 12. In view of the above, I pass the following order :- (i) Appeals of the appellants on the issue of admissibility of area based exemption under the new notification after availing area based exemption under the notification are allowed and the impugned orders on this issue are set aside. (ii) Appeals of the appellants on the issue of having undertaken substantial expansion, in terms of para 8 of the new notification making them eligible for area based exemption in terms of the new notification are allowed and the impugned orders on this issue are set aside. (iii) The appeals of the appellants on the issue of admissibility of refund, under the new notification are partially allowed and the impugned orders, as detailed in the above table, are modified to the extent as discussed in para 11 above, allowing refund of duty to the appellants, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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