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TMI Blog2017 (10) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... aranpur as well as IIT Roorkee. The reports submitted by the technical experts reveal that such increase in installed capacity is the result of changes carried out by the respondent by way of replacement material / consumables and by installing machinery meant for improvement in quality of products. Similar issue decided in the case of COMMISSIONER OF CUS. & C. EX. Versus UTTARANCHAL IRON & ISPAT LTD. [2010 (12) TMI 491 - UTTARAKHAND HIGH COURT], where it was held that it is the factum of substantial expansion which is the determinative factor for grant of exemption. It is immaterial whether the substantial expansion is as a result of additional or new plant and machinery or by renovation /modification of existing plant and machinery. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in existence prior to the claim for area based exemption. They claimed the increase in installed capacity by more than 25% by incurring capital investment of over ₹ 25.75 lakh by way of investment on machinery and by alterations in the installed machinery. Revenue observed that the plant and machinery claimed by the assessee to have been used for capacity enhancement were infact replacement material which was consumed and the machinery installed were only meant for improvement in the quantity of goods manufactured. Revenue was further of the view that the assessee will be eligible for the claim of substantial expansion only by making additional investment in plant and machinery to give effect to the increase in installed capacity by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Tri-Del)] 6. CCE Meerut Vs. Rana Castings Ltd. [2015 (320) ELT 396 (Uttarakhand)] 7. CCE Meerut Vs. Charu Steels Ltd. [2015 (322) ELT 660 (Uttarakhand)] 8. Haryana Steel Alloys Ltd. Vs CCE, N Delhi [2001 (137) ELT 178 (Tri-Del)] 9. Tavadec Industries P Ltd. Vs. CC Bangalore [2002 (145) ELT 548 (Tri-Bang)] The respondent, vide their submissions dated 11.7.2017 also submitted copies of invoices along with the list of plant and machinery used for capacity expansion. 6. After hearing both the sides and perusal of the record, we find that the crux of the issue for decision is whether the respondent assessee has increased the installed capacity of its plant and machinery by over 25% which is the requirem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... city. If that be so, then instead of the respondent, itself, increasing the length of its furnace, could dispose of the same and buy the self-same thing from its vendee after the vendee had enlarged the length thereof In order to prevent such things to happen, the Circular incorporated in it the words additional investment in plant and machinery in modernization . 8. In the above decision of the Uttarakhand High Court as well as other decisions of High Courts and Tribunal, it has been categorically held that it is the factum of substantial expansion which is the determinative factor for grant of exemption. It is immaterial whether the substantial expansion is as a result of additional or new plant and machinery or by renovation /modifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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