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2017 (6) TMI 757 - CESTAT CHANDIGARH

2017 (6) TMI 757 - CESTAT CHANDIGARH - TMI - Increase in installed capacity - benefit of N/N. 56/2002-CE dated 14.11.2002 - denial on the ground that the installed capacity has been increased more than 25%, therefore, they are entitled for benefit of exemption N/N. 56/2002-CE dated 14.11.2002, as the respondent is located in the state of Jammu & Kashmir - Held that: - Board s Circular No. 772/5/2004-CX dated 21.01.2014 states that as substantial expansion is defined in terms of increase in insta .....

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the appellant None- for the respondent ORDER Per Ashok Jindal The Revenue is in appeal against the impugned order wherein the Ld. Commissioner (A) has granted the benefit of exemption Notification No. 56/2002-CE dated 14.11.2002. 2. The facts of the case are that the respondent was engaged in the manufacture of Polyester Laminated Wrappers/Pouches. On 06.06.2005, the respondent requested in writing to claim the benefit of exemption Notification No. 56/2002 ibid on the ground that the installed c .....

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pearing on behalf of the Revenue submits that the installed capacity of the respondent have not been extended by more than 25%. Therefore, they are not entitled for benefit of exemption Notification No. 56/2002 ibid. He further argued that the machine namely Eddy Current Clutch with regulator was procured by the respondent in 2002 and the claim of the respondent is that the said machine installed in 2004 which is not correct, as machine purchased in 2002 cannot be kept ideal for two years, there .....

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4) ELT A175 (SC). 4. None appeared on behalf of the respondent nor any request for adjournment has been received. 5. Considering the fact that the appeal filed by the Revenue is in the year 2008. The special bench has been constituted to deal this case, therefore, the appeal is taken up for consideration to be decided on its own merits. 6. On going through the records placed before us, we find that the respondent has installed equipments i.e. Pouch making machine with accessories, Air compressor .....

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Clutch Machine has been procured by the respondent in 2002 and the same is to be claimed installed in 2004, therefore, substantial expansion has not been achieved by the respondent is not admissible in the absence of any corroborative evidence to support the case of the Revenue is that the said machine was installed in 2002 prior to introduction of the Notification No. 56/2002 ibid. 8. We find that the issue has been examined by the ld. Commissioner (A) in the impugned order has observed as unde .....

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ot less than 25% on or after14.06.2002. There is no dispute about the substantial expansion undertaken by the respondents as discussed in the impugned order. Therefore, one requirement of the notification has been fulfilled by the respondents inasmuch they have undertaken expansion. Regarding the date of purchase and installation of the machinery, I find that the letter dated 29.08.2003 issued by Joint Commissioner, Central Excise Commissionerate, Jalandhar has clarified the issue which needs no .....

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65. The findings of the Tribunal and construction of definition of Substantial Expansion has been based upon the wording of Tariff heading 84.66 that stated required for the initial setting up of a unit or the substantial expansion of an existing unit. The Tribunal has gauged the intention of legislature behine the wording, initially setting up of a unit as that a new unit should be set up. The substantial expansion means addition of a separate/additional line of production. This may be true for .....

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the Board s Circular No. 772/5/2004-CX dated 21.01.2014, referred by any appellants in grounds of appeal is more appropriate in the present case. I have gone through the circular, which is para 3(b) says that as substantial expansion is defined in terms of increase in installed capacity by 25% or more, value of investment in plant and machinery is not the criteria to define substantial expansion. From the circular, the purpose of substantial expansion is increase in the installed capacity by 25% .....

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