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M/s Him Engineers India Pvt Ltd Versus Commissioner of Central Excise, Chandigarh

2016 (2) TMI 326 - CESTAT NEW DELHI

Duty concession under notification no. 50/03 CE dated 10/6/2003 w.e.f. 7/11/2005 denied - eligibility for the exemption based on the expansion of installed capacity by 25 per cent or more - Held that:- We find that from the letter dated 17/2/2009 issued by the Deputy Director of Industries District Solan Himachal Pradesh that the revised capacity after substantial expansion has been above 25% of bonnet assembly consisting of 52 parts and sheet metal for tractors. This communication makes it clea .....

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ces submitted by the appellant and the categorical report received from the District Industries Authorities of the State Government, we find that the appellants had executed substantial expansion of installed capacity of more than 25 per cent and' as such are eligible for the exemption claimed under notification no. 50/03 CE. - Decided in favour of assessee. - E/Misc/51768 & 51769/2015, Appeal No. E/2340/2007 & E/208/2008-EX(DB) - Final Order Nos. A/53311-53312/2015-EX(DB) - Dated:- 19-10-2015 - .....

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ntial expansion of their installed capacity by more than 25 per cent. 2. After certain verifications, the Department sought to deny the exemption as claimed by the appellant. Accordingly, proceedings were initiated resulting in order dated 28/11/2006. The Assistant Commissioner held that the appellant is not eligible for the said concession as they could not establish the fact of substantial expansion of more than 25 per cent. On appeal, the Commissioner (appeals) vide his order dated 25/5/2007 .....

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/10/2007 ordered for pre-deposit of the full amount confirmed by the original authority to hear the appeal. On default by the appellant, the Commissioner (Appeals) dismissed the appeal vide his order dated 13/11/2007. Appellants filed appeal no. E/208/2008 with the Tribunal. 4. Both the above mentioned appeals filed with the Tribunal by the appellant were dismissed vide final order no. 126-127/2008 EX dated 19/3/2008. The appellants filed CEA no. 3/08 with the Hon'ble High Court of Himachal .....

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of exemption are as below: i) Prior to expansion they had installed the capacity of 7200 pieces of bonnet Assembly. The capital machinery added were one compressor, two senders and three welding machines and one 300 MT Hydraulic double action press. ii) The certificate for expanded capacity was issued by the District Industries Authorities after expert assessment report dated 28/10/2005. The installed capacity after expansion was 12000 pieces of bonnet Assembly. iii) The above facts were brought .....

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y. This is the reason for which the Hon'ble High Court remanded the matter for the Tribunal to determine afresh their claim for exemption. v) The department's emphasis on sale of one of their hydraulic press, much later on 6/4/2006 for denying exemption is totally misconceived as even after the reduction of such capacity the installed capacity had an increase of 33 per cent as against the requirement of 25%. vi) The lower authorities' view that the replacement of machinery is not to .....

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et assembly. 6. During the arguments, the ld. Counsel for the appellant, Shri Sandeep Singh, narrated the chronological developments resulting in the present appeal and reiterated that the appellants were not given fair chance to explain the factual position with the documents before the lower authorities. He submitted that the capacity expansion of the appellant's unit is well documented and was certified by the District Industries Authorities after due verification by the expert committee. .....

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ettle the matter clearly. 7. The ld. AR, Shri Nanthuk, reiterated the findings of the lower authorities and stated that many details now pleaded by the appellant were apparently not submitted before the lower authorities. 8. We have heard both the sides and examined the appeal records. The point for determination is the eligibility of the appellant for the exemption under notification no. 50/03CE based on the expansion of installed capacity by 25 per cent or more. The factual position of the inc .....

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l unit. It will not be correct to say that all the pre-existing machinery should continue to exist with additional machines and then only substantial expansion on installed capacity will be accepted. The point for consideration is increase in the installed capacity which will naturally involve changes in the machinery, replacement and/or addition of new machinery. In this regard, reference can be made to the decision of Hon'ble Uttrakhand High Court in the case of Cham Steels Limited 2015 (3 .....

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