TMI Blog1989 (5) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... factory which has commenced production during the period commencing on the First day of January, 1982 and ending with 31st March, 1986 ........", from so much of the duty of excise leviable thereon which was in excess of the amount calculated at the rate of Rs. 205/-per tonne. 3. The case of the petitioner is that the word "production" means commercial production, and if any cement had been produced during trial runs that would not be taken into consideration in seeing as to whether the Notification in question would be applicable or not. According to the petitioner it commenced commercial production with effect from 1st January, 1982 and in this connection, reliance is placed by the petitioner on, a letter dated 8-12-1983 of the Joint C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the process of or has been set up it has trial runs. It has to be seen as to whether the machinery which has been installed is working in good order and has been supplied according to the specifications. In this process an end product comes into existence, which obviously, may be disposed of by the manufacturer. It will, however, be a question of fact, which must be deduced from after taking all the circumstances into consideration, as to whether the production is in the nature of a trial production or a commercial production. If the contention of the Revenue is correct, then even if one tonne of cement had been produced prior to 1st January, 1982, a factory would not be entitled to exemption which had been granted by the aforesaid Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The submission is that the installed capacity of the unit is 5 lakh metric tonnes and the production of 1,66,585 metric tonnes shows that it was only a trial production. I am unable to accept this contention. There may be various factors why a unit which has been newly set up may not be in a position to achieve the installed capacity. It is not unknown that a newly installed unit takes one or, may be, more years before it can achieve the rated capacity. In any case, the facts on the record of the present case clearly belie the contention of the petitioner. Even according to the petitioner it had started commercial production after 1st January, 1982. In fact, the letter relied upon by the petitioner, received from the Joint Controller of Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied upon by the learned counsel for the petitioner. Dealing with the provisions of Section 15C of the Income-tax Act, 1922, the Bombay High Court came to the conclusion that articles are said to be produced only when there is a commercial production and not when there is a trial production. There can be no dispute with this proposition. I had already held that the word "production" in the Notification in question means the commercial production and not trial production, but the decision of the Bombay High Court can be of no assistance to the petitioner on the facts of the present case. The extent of production in the year 1981 of the petitioner leaves no manner of doubt that the petitioner had commenced commercial production in the year 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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