9911796707
TMI Blog2010 (5) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... he industrial area specified in this notification which have commenced commercial production on or after 7th day of January, 2003, but not later than 31st March, 2010 and industrial units existing prior to 7.1.2003 in the specified areas but which have undertaken substantial expansion by way of increase in the installed capacity by not less than 25% on or after 7th day of January, 2003, but have commenced production from such expanded capacity not later than 31st day of March, 2010. The appellant company was availing this exemption by claiming to be in the second category i.e. units existing prior to 7.1.2003 which have undertaken substantial expansion by way of at least 25% increase in installed capacity on or after 7.1.2003. The appellants vide their letter dated 3.7.2003 had intimated to the jurisdictional Dy. Commissioner of Central Excise that they were going to increase the installed capacity of their furnace from 4 M.T. to 6 M.T. and vide their letter date 4.9.2003 they intimated that the expansion work has been completed and capacity of their furnace has increased from 4 M.T. to 6 M.T. The appellants in this regard also submitted certificate of Tehsildar, Kotdwar mentioning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicated by the Jt. Commissioner vide a common order-in-original No.04-11/JOINT COMMISSIONER/M-I/01 dated 30.01.2006 by which the entire duty demand of rs. 1,03,81,578/- was confirmed along with interest at the applicable rate as per provision of Section 11AB of the Central Excise Act and besides this, penalty of Rs.1,03,81,578/- was imposed on the appellant company and, a penalty of Rs.10 lakh was imposed under Rule 26 of Central Excise Rules, 2002 on each of the five Directors. The appellant company as well as its five Directors filed appeal to the Commissioner (Appeals) against this order of the Jt. Commissioner and the Commissioner (Appeals) vide Order-in-Appeal No.260-265/CE/MRT-I/06 dated 30.11.2006 upheld the duty demand and the interest but reduced the penalty on the Directors from Rs.10 lakhs each to Rs.1 lakh each. The Commissioner (Appeals), however, held that the appellant company would be eligible for Cenvat Credit of duty on the inputs/capital goods. It is against this order of the Commissioner (Appeals) that six appeals bearing No. E/495 to 500/07 have been filed before the Tribunal. 1.3 The other two show cause notices for duty demand of Rs.2,13,58,256/- for Novemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.50/03-CE to suggest that there should be increase in each and every unit of the plant and that condition of the notification would be satisfied, if there is at least 25% increase in the installed capacity and that in view of this, the impugned orders are not correct. 2.2 Shri Sunil Kumar, learned D.R., defended the impugned order by reiterating the findings of the Commissioner/Commissioner (Appeals) and emphasized that the purpose of the exemption notification was to attract investment to the hill areas, that the substantial expansion of 25% or more in installed capacity should be by installation of additional plant and machinery, that Tribunal's order in the case of Travancore Titanium Products Ltd. (supra), relied upon in the impugned order has been up held by Hon'ble Supreme Court vide judgment reported in 2003 (154) ELT A-175 (SC) and that in this case, since the increase in installed capacity has been achieved merely by replacing the old furnace with a new furnace with higher capacity, the condition of substantial expansion by way of at least 25% increase in installed capacity has not been satisfied. 3. We have carefully considered the submissions from both sides and per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes under notification No.32/99-CE and 33/99-CE both dated 8.7.1999; (b) for Jammu and Kashmir under notification No.56/2007-CE and 57/2002-CE both dated 14.11.2002; (c) for Himachal Pradesh and Uttranchal under notification NO. 49/03-CE and 50/03-CE both dated 10.6.2003. 2. The exemption contained in these notifications is applicable either to the new industrial units or units undertaking substantial expansion by way of increase in installed capacity by not less than 25%. 3. Board has received representations from various quarters seeking clarifications on the term - "Substantial expansion". With a view to ensure smooth implementation of exemption schemes, following guidelines are circulated to explain the scope of "Substantial expansion" (a) Increase in installed capacity of an existing unit by not less than 25% should be the result of installation of additional plant and machinery. Any increase in installed capacity by means other than installation of additional plant and machinery would not qualify for benefit of exemption under "Substantial expansion." (b) As substantial expansion is defined in terms of increase in installed capacity by 25% or more, value of investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal's judgments in cases of National Newsprint and Paper Mills Ltd. vs. Collector of Customs, Mumbai, reported in 1987 (32) ELT 153 and Travancore Titanium Products vs. Collector of Customs, Cochin (supra). But both these judgments are in respect of scope of the words - "Substantial expansion" in heading 84.66 of the Customs Tariff which covered - "...... machinery etc... required for initial setting up of a unit, or substantial expansion of an existing unit." In the case of M/s. National Newsprint and Paper Mills Ltd. (supra), the production from existing machinery of the appellant was much below the installed capacity and they wanted to import certain machinery by taking the benefit of project import scheme under heading 84.66 for increasing their production and the Tribunal held that this would not amount to "Substantial expansion of an existing unit." In the case of Travancore Titanium Products (supra) the appellant imported machinery etc. for 450 tpd Sulphuric Acid plant which was to replace their 300 tpd Sulphuric Acid plant and sought project import scheme benefit under heading 84.66 and the Tribunal held that replacing 300 tpd plant is not "Substantial expansion of an ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
