TMI Blog2017 (4) TMI 1428X X X X Extracts X X X X X X X X Extracts X X X X ..... lines in fact added to the conditions stipulated in the Scheme - Single Judge was also of the view that issue involved is not to be examined only from the point of view as to how NPV is ordinarily calculated but it is to be contextualized in the setting of the Scheme. On a reading of the provisions of the Scheme as well as the Guidelines we are of the view that the Guidelines have merely supplemented the Scheme and there is no conflict as such between the Scheme and the Guidelines. Hence, the question of Guidelines overriding the Scheme dated 21.03.2007 does not arise at all. Having regard to the fact that the definition of "i" in the formula in Clause 2.4 of the Guidelines indicates "number of completed years from base year", we are also of the view that the learned Single Judge was right in holding that discounting of the value of capital expenditure is to take place from the year subsequent to the base year. This is made further clear from the language of Clause 2.7(b) of the Guidelines. Thus, the learned Single Judge was fully justified in concluding that in the light of Clause 2.4 and Clause 2.7 of the Guidelines, the investments made in the base year are not to be disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny other appropriate writ, order or direction which this Hon'ble Court may deem fit and suitable in the facts and circumstances of the case. 6. The said writ petition was disposed of by the learned Single Judge by the order under appeal dated 03.07.2015 holding that the eligible capital expenditure incurred in the base year shall not be discounted to arrive at the threshold limit and accordingly directing the respondents to re-calculate the threshold limit under the scheme. The learned Single Judge also directed that in case the petitioner meets all other parameters, the respondents will release the incentives to which the petitioner is eligible under the scheme in terms of the provisions set out therein. 7. Challenging the said order, the Government of India filed the present appeal. 8. We have heard Sh. Sanjay Jain, learned ASG appearing for the appellants and Dr. Ashwani Kumar, the learned Senior Counsel appearing for the respondent/writ petitioner. 9. Before adverting to the contentions advanced by the parties, the Notification dated 21.03.2007 under which the Special Incentive Package Scheme (SIPS) (hereinafter referred to as 'the Scheme in question' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % of the capital expenditure (as defined in sub-paragraph 3.3) during the first 10 years for the units in SEZ and 25% o the capital expenditure for non-SEZ units. Non-SEZ units shall be exempt from CVD. The incentives, if any, offered by the State Government or, any of its agencies or local bodies shall be over and above this amount. 3.2 The period of ten years shall be the first ten years of the project life from the start of the project and not with regard to the start of any subsequent phase of the project. 3.3 The capital expenditure will be the total of capital expenditure in land, building, plant and machinery and technology including R D. The cost of land exceeding 2% of the capital expenditure shall not be considered for calculation in this regard. xxxx xxxx xxxx 5.1 Those investors who choose equity as part of their incentive packages shall be given such equity after the financial closure for the project and equity shall be released on a proportionate basis as equity is brought in by the promoters. 5.2 All other incentives shall be released after the end of the financial year in which the NPV of the total investment exceeds the threshold value. 5.3 Thereafter, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the report of the annual audited accounts as adopted by the Board of Directors and a certificate from the auditors of the company with regard to date-wise expenditure on items eligible under the scheme. Such request shall be made and entertained subject to approval of the Government after the end of FY in which the NPV (as calculated as at the base year) exceeds the threshold value of the total eligible investment. The veracity of all claims submitted by applicants will be duly verified. 3.8 Investments made before the date of the receipt of application and investment in land made more than six months before the date of receipt of application shall not be considered for calculation of capital expenditure under the SIPS. 13. It is not disputed before us that the petitioner falls under the category of other eco system products provided under para 2.3 of the Notification dated 21.03.2007. The threshold NPV for the said products has been prescribed as ₹ 1000 crores and above. The petitioner claims that its NPV is ₹ 1183 crores and therefore it is entitled for the subsidy of ₹ 300 crores. However, according to the respondent No.1, the NPV of eligible capital e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, the guidelines in fact added conditions to the 2007 notification. xxx xxx xxx 16.4 A plain reading of the definition of the symbol i in the formulae, provided in clause 2.4, along with clause 2.7(a), (b) (c) of the guidelines, would establish the following: First, the base year is that FY, in which application is made. Second, the threshold limit is the minimum amount of investments calculated in NPV terms for claiming benefits under the scheme. Third, for eco-system units , the minimum amount of threshold limit, which an applicant had to achieve, was ₹ 1000 crores, which was to be made during the period of first 10 years of the project following the base year . 16.5 Consequently, the base year in the instant case would necessarily be the FY 2008-2009, as the application for the purposes of grant of subsidy was made only on 09.04.2008. Therefore, in calculating the NPV, of the investments/ eligible capital expenditure, made during the first ten (10) years of the project, would commence from the date following the base year. 16.6 The purpose it appears is that the base year is fixed as per clause 2.7 (c) of the guidelines, which in turn is dependent on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for the appellants that the interpretation given by the learned Single Judge is bad in law inasmuch as it militates against the express language of the Scheme in question as also the Guidelines and makes the provisions of the Guidelines override the Scheme in question which is impermissible under law. It is also contended that in the light of para 2.3 of the Scheme which provides that the threshold value shall be taken as the NPV of investments made during the first ten years of the project life and the discount rate will be @ 9% , it is clear that discounting @ 9% shall be done during the said period of ten years. It is further contended that since the Guidelines dated 14.09.2007 framed by the respondent No.1 can only supplement/provide what was not already provided in the Scheme, the said Guidelines have to be read in consonance with the Scheme and even in case of any conflict, the provisions of Guidelines which are repugnant to the Scheme need to be read/struck down. 21. It is sought to be explained by the learned ASG that the expression following the base year in clause 2.7(b) of the Guidelines cannot be given effect to since the interpretation on the basis of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions made on behalf of the parties. 27. Admittedly, the base year for calculation of NPV would be the Financial Year 2008-09. Clause 2.4 of the Guidelines has set out the formulae for calculating NPV. According to the petitioner, the value of the investment made in the base year should be taken as it is, i.e. without being discounted. Thus, it is claimed that the investments made till the end of Financial Year 2008-09, i.e., 31.03.2009 could not be discounted. If the said interpretation of the petitioner is accepted, it would meet the threshold NPV of ₹ 1000 crore prescribed under Para 2.3 of the Scheme and the petitioner would be eligible to seek grant of incentive of 25% of the capital expenditure in terms of Para 3.1 of the Scheme. 28. On the other hand, the specific case of the respondents is that the period of first 10 years shall be reckoned from the start of the project as provided by Para 3.2 of the Scheme and therefore the base year shall also be included for calculation of threshold value and the investment made during the base year shall also be discounted. 29. Having regard to the said submissions, the learned Single Judge in the order under appeal framed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oposition that the intention of the maker of the document is to be ascertained from the language used in the document, and if, the language is clear and unambiguous, no interpretative rules can be brought into play. If, as indicated above, the guidelines are considered as an extension of the scheme, then the use of the expression from in the definition of the symbol i and also the use of the word following in clause 2.7 (b), prior to the expression base year , would persuade me to conclude that the investments made in the base year are not to be discounted. 32. We entirely agree with the reasoning of the learned Single Judge. 33. On a reading of the provisions of the Scheme as well as the Guidelines we are of the view that the Guidelines have merely supplemented the Scheme and there is no conflict as such between the Scheme and the Guidelines. Hence, the question of Guidelines overriding the Scheme dated 21.03.2007 does not arise at all. Having regard to the fact that the definition of i in the formula in Clause 2.4 of the Guidelines indicates number of completed years from base year , we are also of the view that the learned Single Judge was right in holding that ..... 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