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2016 (5) TMI 379 - THE AUTHORITY FOR ADVANCE RULINGS NEW DELHI

2016 (5) TMI 379 - THE AUTHORITY FOR ADVANCE RULINGS NEW DELHI - TMI - Area Based exemption - expansion of unit - Whether the benefit of Notification No. 50/2003-C.E. dated 10.06.2003 will be available to goods manufactured from the unit i.e. PLANT-II HARIDWAR established from expansion of the existing unit - Held that:- Notification No. 50/2003-CE inter-alia exempts goods other than specified goods cleared from units located in areas mentioned in Annexure II and III to the Notification from who .....

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Notification. Therefore, this sub-condition is satisfied. It is also noticed from the Intimation/ Declaration under Notification No. 50/2003-CE, submitted by the applicant that they commenced commercial production on 26.03.2010. Since it was a new unit, it could not have started production before 07.01.2003. Therefore, this sub-condition is also met by the applicant.

It is noticed that the Circular No. 939/29/2010-CX dated 22.12.2010 has clarified that Notification No. 50/2003-CE doe .....

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correct. Relevant Notification No. 50/2003-CE, as also CBEC Circular dated 22.12.2010 and 17.02.2012, do not envisage such condition. In view of said clarifications issued by CBEC, applicant can continue to avail the benefit of excise exemption.

As far as second issue raised by Revenue regarding applicant starting a new unit i.e. Haridwar Plant II and not falling under the existing unit, is concerned, applicant has relied on Circular No. 960/03/2012-Cx dated 17.02.2012. It is observe .....

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t had started commercial production w.e.f. 26.03.2010. Therefore, in view of Circular dated 17.02.2012, applicant is eligible for said exemption. - Decided in favour of applicant - Ruling No. AAR/CE/ 09/2016 in Application No. AAR/44/CE/24/2014 - Dated:- 11-3-2016 - Justice V.S. Sirpurkar (Chairman), Shri S.S.Rana and Shri R.S.Shukla, JJ. For The Applicant : Shri R.Krishnan, Advocate For The Department : Shri Amresh Jain(AR) Ruling M/s Lakhani Footwear Private Ltd (hereinafter also referred to a .....

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for this Haridwar Plant-II, applicant would obtain separate factory license and E.S.I., PF Code; that applicant proposes to separate existing works with the proposed Haridwar Plant-II by putting a wall in between the two. The existing works shall be named as Lakhani Footwear Pvt. Ltd and the expanded capacity where they would put the additional plant and machinery and construct the building, shall be named as Lakhani Footwear Pvt. Ltd (Haridwar Plant-II) for their accounting, project monitoring .....

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X dated 22.12.2010 that units which are already enjoying the duty exemption can produce new articles after the cutoff date using the same plant and machinery or by installing a new plant and machinery or capital goods and the provisions of Notification No. 50/2003-CE do not place a bar or restriction on an addition / modification in the plant and machinery or on the production of new products by eligible units after the cutoff date and during the exemption period of ten years as per the notifica .....

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939/29/2010-CX dated 22.12 2010. Further, the expansion and installation of the plant and machinery is taking place in the same Khasra No. 72 & 74 for which ten year exemption has already been granted and is being availed. When even extending to adjacent plot of land is allowed, there is no reason why similar expansion within the same Khasra no. cannot be permitted. 4. Applicant has raised the following question before this Authority: Whether the benefit of Notification No. 50/2003-C.E. date .....

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.e. Plot No.11, Sector 11, SIDCUL, Haridwar; that the applicant proposes to divide existing plot into two parts by putting a wall; that after completion of Civil work at the proposed vacant space, they will name it as Haridwar Plant-II ; that the applicant also proposes to take a separate factory license, ESI No. and P.F. Codes. Revenue submits that from the aforesaid activities of the applicant, it appears that the said Haridwar Plant-II cannot be termed as expansion of the existing unit and wi .....

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s that the proposed Unit II does not fall under the category of existing unit, which has undergone substantial expansion in terms of Notification No. 50/2003-CE. Second issue raised is connected to the first issue, i.e., the proposed Unit-II will come into existence after the sunset clause i.e. after 31.03.2010, therefore said unit will not be eligible to enjoy the benefit of exemption Notification No. 50/2003-CE. 7. It is observed that the applicant submitted Intimation / Declaration dated 29.0 .....

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3-CE dated 10.06.2003 inter-alia exempts goods other than specified goods cleared from units located in areas mentioned in Annexure II and III to the Notification from whole of the duty of excise or additional duty of excise, subject to following 2 conditions (i) The manufacturer who intends to avail of the exemption under this notification shall exercise his option in writing before effecting the first clearance and such option shall be effective from the date of exercise of the option and shal .....

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in manufacture of specified goods; (d) description of the specified goods produced; (e) date on which option under this notification has been exercised; 9. It is observed from the Intimation / Declaration filed by the applicant under Notification No. 50/2003-CE that both above conditions have been satisfied. 10. Further, clause (2) of Notification No. 50/2003-CE dated 10.06.2003 reads as under; 2. The exemption contained in this notification shall apply only to the following kinds of units, name .....

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ave commenced commercial production from such expanded capacity, not later than the [31st day of March, 2010.] 11. It is observed from above that exemption benefit under 2(b) above will not be available to the applicant as the industrial unit did not exist before 07.01.2003 and it started trial production only on 21.03.2010. It is to be seen if Condition 2(a) above is satisfied by the applicant, which consists of; a) Whether new industrial unit is set up in areas mentioned in Annexure II and Ann .....

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it was a new unit, it could not have started production before 07.01.2003. Therefore, this sub-condition is also met by the applicant. 12. Applicant has relied on Circular No. 939/29/2010-CX dated 22.12.2010 issued by CBEC regarding scope of Notification No. 50/2003-CE. Relevant portion of the Circular is reproduced as under: Representations have been received from Trade and Industry Associations seeking clarification on the availability of the exemption benefit under these notifications in the .....

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uction. (i) Where new dosage forms are manufactured after the cut-off date on the same line of production with the same machinery. (ii) Where a unit manufacturers a new product by installing fresh plant, machinery or capital goods after the cut-off date. Board has examined the matter. Under the said notifications, any new unit set up or an existing unit which has undergone substantial expansion that commences commercial production before the cut-off date is entitled to excise duty exemption in r .....

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the above situations, the benefit of the excise duty exemption under the notifications would continue to be available to eligible industrial units. However the period of exemption would remain ten years and would not get extended on account of such modifications or addition under any circumstances . 13. It is noticed that the above Circular has clarified that Notification No. 50/2003-CE does not place a bar or restriction on any addition / modification in the plant or machinery or on the product .....

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ot envisage such condition. In view of said clarifications issued by CBEC, applicant can continue to avail the benefit of excise exemption. 14. As far as second issue raised by Revenue regarding applicant starting a new unit i.e. Haridwar Plant II and not falling under the existing unit, is concerned, applicant has relied on Circular No. 960/03/2012-Cx dated 17.02.2012. Relevant extract of said Circular are reproduced, as under:- References have been received from field formations as well as fro .....

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emption under an area-based Notification expands by acquiring a plot of land adjacent to its existing premises and installing new plant/machinery on such land. In the context of expansion of a Unit by acquiring an adjacent plot of land and installing new plant and machinery on such land, attention is invited to Board s Circular No. 939/29/2010-CX dated 22.12.2010 wherein it was inter-alia, clarified that any growth in the production/output of a unit by installing fresh plant and machinery would .....

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he situation of expansion of an eligible unit by acquiring an adjacent plot of land and installing new plant and machinery on such land, is akin to expansion by way of installing new plant and machinery inside the existing plot/premises. CBEC clarified that in such cases, the exemption should continue to be available from the residual period of exemption. In the present case, applicant proposes to effect expansion in Khasra No. 72 and 74, wherefrom the new unit had started commercial production .....

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