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TMI Blog2015 (4) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... ion lines increased to two. 1.2 On 10/06/2003 Notification No. 50/2003-CE was issued which provided for full duty exemption in respect of duty of excise leviable under Section 3 (1) of Central Excise Act, 1944 and the Additional Duties of excise leviable under Additional Duties of Excise (Goods of Special Importance) Act, 1987 [AED (GSI)] and under Additional Duties of Excise (Textile and Textile Articles) Act, 1978 [AED (T&TA)] to the units manufacturing the goods other than the goods mentioned in Annexure I to the notification and which are located in the areas specified in Annexure II of the notification. This exemption notification was applicable to two types of units (1) the new industrial units which commenced their commercial production on or after 07/1/03 but not later than 31/3/2010 (2) the industrial units existing before 07/1/03 and which have undertaken substantial expansion by the way of increase in installed capacity by not less than 25% on or after 07/1/03 and have commenced commercial production from such expanded capacity not later than 31/3/10. The appellant under their letter dated 26/9/03 addressed to the Jurisdictional Assistant Commissioner inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication and besides demanding interest on duty under Section 11AB, penalty of equal amount was imposed on the appellant under Rule 25 (1) of the Central Excise Rules. In both the orders, the duty exemption has been denied mainly on the basis of the IIT Professor s report and also taking into account the fact that the company is under BIFR and for this reason also, their claim that they have spent money to expand their installed capacity is not believable. Against the above orders of the Commissioner, these appeals have been filed. 2. Heard both the sides. 3. Ms. Surabhi Sinha, Advocate, the learned Counsel for the appellant, pleaded that the appellant had undertaken expansion in the year 2003 based on the technical opinion of M/s Anurag Technologies, that on the basis of technical opinion of M/s Anurag Technologies, the Board of Directors took a decision to undertake substantial expansion as it would not cost much and would result in economies of scale and reducing the cost of production, that the exercise of substantial expansion was undertaken during August and September 2003 and was completed by third week of September 2003, that in this regard M/s B.K. Arora and Associates i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i B.C. Sharma, Vice President (Production) in their respective statements have given details of the exercise of the expansion of the installed capacity which have not been disputed. She, therefore, pleaded that the impugned orders are not correct. 4. Shri M.S. Negi, learned DR, defended the impugned order by reiterating the findings of the Commissioner in it and pleaded that while for first expansion of installed capacity from 13 lakhs CRTs to 20 lakhs CRTs per annum took place in the year 1997 and for which investment of 2.71 crores have been made, for the claimed expansion in the year 2003 from 20 lakhs per annum to 30 lakhs per annum, a meagre investment of about Rs. 8 lakhs has been shown, which is not believable, that Shri B.C. Sharma, Vice President in his statement had stated that the capacity expansion has been undertaken to reduce the cost of production by increasing the productivity and also to avail the benefit of duty exemption, that Professor Arun Kumar in his report has given sufficient reasons for his conclusion that no investment has been undertaken, that the appellant s claim of enhancement of capacity of production is not backed by the certificate from the Distri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional machinery. 5. Ms. Surabhi Sinha, in rejoinder pleaded that the appellant in their reply to the show cause notice had given a list of the 11 new machinery which had been fabricated in the factory and this fact is not disputed by the Department. Beside this, there were 10 machines in which modifications had been done. She, therefore, emphasised that the substantial expansion in the installed capacity had been achieved by addition of new machine and not by merely improving the efficiency or by minor changes in the machinery. 6. We have considered the submissions from both the sides and perused the records. 7. The basic point of dispute in this case is as to whether the appellant have expanded their installed capacity by more than 25%. If this claim of the appellant is correct, they would be eligible for the exemption notification. The appellant in support of this claim rely upon the certificate dated 25 September 2003 given by M/s B.K. Arora and Associates. The Department, however, relies upon the report of Professor Arun Kumar of the Department of Electronics and Computer Engineering in IIT, Roorkee. While the certificate of M/s B.K. Arora and Associates certifies that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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