TMI Blog2014 (6) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 the substantial expansion, in terms of the new notification. As regards admissibility of refund by way of self credit which the appellants have claimed and availed/utilized observe tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... June, 2013 7120420 4073102 4 July, 2013 3110932 4339073 5 Aug, 2013 1004343 1985163 6 Sep, 2013 1523366 619645 7 Oct, 2013 953257 837946 8 Nov, 2013 2248105 787135 9 Dec, 2013 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 Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31-12-2013, under Section 11A of the Act, read with para 5(e) of the new notification. 3. Being aggrieved, the appellants have filed these appeals, along with the stay applications, on the following grounds :- (i) That the impugned orders are bad in law inasmuch as they violate the principle of natural justice as no opportunity is given to them to explain their case and these orders lacks appreciation of the provisions of the new notification. (ii) That it is settled position that in case the claim of an assessee is to be rejected, the assessee must be given opportunity to explain his case before such an order is passed. No such opportunity was accorded to the appellants. Reliance placed on the case law of CCE, Jaipur-II v. Anna Petrochem Pvt. Ltd. [2009 (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 di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Chartered Accountant, certifying installing machinery worth ₹ 1,78,40,875/- i.e. an increase of 32.75% in fixed capital investment in plant and machinery. 4. Personal hearing in the Stay Applications of the appellants was held on 25-4-2014. Shri Naveen Prothi. President of the appellants appeared and reiterated the submissions made in their Stay Applications as well as in their main appeals and also submitted copies of documents such as, G.M., DIC s order dated 7-3-2014, Form SE-B, ALC NO. ALC/S/720, dated 10-1-2014, G.M., DIC s letter dated 18-1-2014 and 15-4-2014 J K State Pollution Control Board s letter dated 7-3-2014. The appellants were asked to produce Labour Register from 1-4-2012 onwards and PDD (relating to power load) which they promised to submit by 2nd of May, 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il the area based exemption. The relevant provisions of the new notification are reproduced as under. 8. The exemption contained in this notification shall apply only to the following kind of units, namely :- (a) New Industrial units which commence commercial production on or after the 6th day of February, 2010; (b) Industrial units existing before the 6th day of February, 2010; but which have, - (i) undertaken substantial expansion by way of increase by not less than 25% in the value of fixed capital investment in plant and machinery for the purposes of expansion of capacity or , modernization and diversification and have commenced commercial production from such expanded capacity on or after the 6th day of February, 2010 or (ii) made new investments on or after the 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e) for setting up of new units or for units undertaking substantial expansion. Further, Notification No. 1/2010-C.E. does not debar an existing unit which has availed of excise duty exemption under Notification No. 56/2002-C.E. 57/2002-C.E., both dated 14-11-2002 by way of substantial expansion, to avail of excise duty exemption again by way of substantial expansion. 3. It is, therefore, clarified that an existing unit which has availed of excise duty exemption under Notification No. 56/2002-C.E. 57/2002-C.E., both dated 14-11-2002 by way of substantial expansion can avail of excise duty exemption under Notification No. 1/2010-C.E., dated 6-2-2010 again by way of second substantial expansion so long as it satisfies the conditions stipulated under Notification 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 not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciated value) of plant machinery is ₹ 5,44,77,279/- and the net value (depreciated value) is ₹ 3,27,39,450. Addition in plant machinery during the year is ₹ 1,78,40,875/-. Thus, the Gross Block of plant machinery as at 31-3-2013 is ₹ 7,23,18,154/- and the net block is ₹ 4,79,00,043/-. On analysis of this data, I observe that %age increase in plant machinery of appellants unit, during substantial expansion, over the un-depreciated value of plant machinery (Gross Block) is to the tune of 32.75% and this %age increase over the depreciated value (Net Block), of ₹ 3,27,39,450/- is to the tune of 54.49%. 9.3 In view of the above discussions, I 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 the substantial expansion, in terms of the new notification. 10. As per para 8 of the new notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicating authority has rejected the refund claimed by the appellants and has ordered recovery of refund alongwith interest, which has been availed and utilized by the appellants. On this point, I observe that though the appellants are entitled to refund of duty, by way of self credit, as they have fulfilled the conditions of substantial expansion contained in para 8(b) of the new notification However, they are entitled to refund of duty in terms of the value addition norms contained in para 2 of the new notification. Since, the amount of refund admissible to the appellants has not been quantified in the impugned orders, therefore, I order that the adjudicating authority would quantify the amount of refund admissible to the appellants 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 admiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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