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2017 (5) TMI 49 - AT - Central ExciseArea Based Exemption - Substantial expansion of installed capacity - benefit of N/N. 50/2003-CE dated 10.06.2003 - claim of Revenue is that the corrugation machine is crucial machinery for manufacturing of corrugated boxes has not been installed, therefore, in the absence of the installation of the said machinery, there is no expansion of more than 25% of installed capacity and appellant is not entitled for the benefit of said Notification - whether the appellant has increased installed capacity more than 25% w.e.f 26.07.2004 or not? - Held that: - any increase in installed capacity means other than installation of additional plant and machinery would not qualify for the benefit of exemption notification, there should be increase in installed capacity of an existing unit by not less than 25% should be the result of installation of additional plant and machinery. In the CBEC Circular, it is nowhere set out that there should be increased in more than 25% in the machinery installed in the factory of the appellant. The CBEC Circular clarified that there should be additional plant and machinery which should result in increase of more than 25% in the installed capacity. The Hon’ble High Court of Uttrakhand in the case of Uttaranchal Iron & Ispat Ltd. [2010 (12) TMI 491 - UTTARAKHAND HIGH COURT] has held that the circular nowhere says that such machinery, in order to be additional machinery, should be in addition to those, which are in existence. The said clarification, which also used the word additional investment in plant and machinery in modernization, read with other part of circular, makes it abundantly clear that the additional plant and machinery, mentioned therein, is not in addition to the existing, but signifies something new brought-in in the manufacturing process, which is turn, increases the capacity. The appellant has made some addition in their plant and machinery which resulted in increases their production capacity more than 25% which is not disputed by the Revenue, and thus is entitled for exemption - as the appellant is entitled for benefit of exemption Notification 49-50/2003-CE dated 10.06.2003, therefore, the demand confirmed against the appellant are not sustainable. Appeal allowed - decided in favor of appellant.
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