P. Anjani Kumar DECISION
S.S. Garg, Member (J)
1. Revenue has filed the present appeal against the impugned order dated 24.05.2013 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has rejected the department's appeal and upheld the Order-In-Original.
2. Brief facts of the present case are that the respondent registered with the Deptt. vide Regn. No. AABCP6257AXM001 dated1.7.03 are engaged in the manufacture of Ferro Silicon, Calcium Carbide and Ferro Chrome falling under 1st Schedule to the Central Excise Tariff Act, 1985 (5 of 1986). They requested that they intend to avail the benefit of Notification No. 1/2010-CE : MANU/EXCT/0004/2010 dated 6.2.2010 (hereinafter referred to as "the notification") after undertaking expansion of their unit by making new investment by more than 25% of the existing value of plant & Machinery after 6.2.2010. In support of their claim, they placed on records the copies of requisite documents with regard to installation of additional machinery and approvals granted by the DIC Jammu. The adjudicating Authority after going through the case records accepted the said expansion by way of increase by not less than 25% in the installed capacity of the unit as per provisions of the said notification w.e.f. 24.3.2012 i.e. date of production from expanded capacity. Aggrieved by the said order passed by the adjudicating authority revenue has filed appeal before the Commissioner (Appeals) and the Commissioner (Appeals) vide the impugned order has rejected the appeal of the appellant and upheld the order passed by the adjudicating authority. Hence, the present appeal. The Respondent has filed the cross objections which are also listed for today. Further, the Ld. Counsel for the respondent his vide letter dated 18.12.2023 requested the Tribunal to decide the matter on merits as he is unable to appear on account of severe throat infection.
3. Heard both the parties and perused the record.
4. Ld. AR appearing for the appellant submits that the impugned order is not sustainable in the law as the same has been passedwithout properly appreciating/interpreting the exemption Notification No. 01/10-CE : MANU/EXCT/0004/2010 dated 06.02.2010. He further submitted that the respondents are not entitled to the benefit of the said notification on the basis of para 8(b)(i) of the said notification. He further submitted that taking the depreciated value of plant & Machinery would go against the spirit of the said notification. He also submits that when notification is silent as to whether depreciated value or original value of the plant and machinery is to be considered for computing 25% limit, one has to look at the intention of notification and take a view in accordance with its intention.
5. He further submits that both the authorities below have not examined the notification in its proper perspective. He further submits that the present case is not a case relating to expansion of capacity but a case whether existing product has been replaced by a new product and therefore the respondents are not entitled to the benefit of notification 01/10-CE : MANU/EXCT/0004/2010 dated 06.02.2010.
6. On the other hand, the respondent has filed the cross objections which are on record and as per the respondent both authorities below have properly examined the applicability of notification 01/10-CE : MANU/EXCT/0004/2010 dated 06.02.2010 and found that the respondents are entitled to the benefit of the said notification. Further, as per the cross objections the respondent has stated that para 8(b)(i) of the said notification stipulates that substantial expansion must be for the purpose of expansion of capacity or modernization and diversification.
7. After Considering the submission of the Ld. AR and the cross objections filed by the respondent we find that both the authorities below have examined the applicability of the notification 01/10-CE : MANU/EXCT/0004/2010 06.02.2010 and has reached the conclusion that the respondent is entitled to the benefit of the said notification. Further, we find that the Commissioner (Appeals) has given findings that nowhere in the notification restrictions have been imposed that the expansion of capacity should only relate to the expansion in the installed capacity of the existing product only.
8. He has further held that this interpretation by the department is not correct in view of the para 8(b)(i) of the said notification. GM, DIC Jammu has allowed the party to manufacture Ferro Chrome instead of Calcium Carbide. The party has altogether stopped manufacturing of Calcium Carbide. Thus, the instant case is a case which satisfy the criteria laid down at para 8(b)(i) of the said notification. Further, we find that the installation of new plant and Machinery, its use in the manufacturing of final products and expansion in the manufacturing capacity by way of use of newly installed plant and machinery is not disputed by the department.
9. The purpose stipulated in para 8(b)(i) of expansion of capacity means expansion of capacity of the existing product or diversification from the existing product. Further, we find that the Commissioner (Appeals) in para 7(i) has observed that exemption notification has to be interpreted by taking into consideration, the language of the notification which has to be given its due effect. If the tax payer fallswithin the plain terms of the exemption, it cannot be denied its benefit by calling any aid a supposed intention of the exempting authority. There are catena of judgments that the reading of the Notification cannot be done in the manner, so as to give a narrow and restricted meaning. It is well settled that the interpretation of the Notification should not be done in such a way as to make the notification otiose or nugatory. Further, the Commissioner has relied upon the judgment of the Tribunal in the case of DHL Lemuir Logistics Pvt. Ltd. Vs.CCE [ MANU/CM/0083/2012 : 2012 (284) E.L.T. 505 (Tri.- Mumbai)] wherein the Hon'ble Tribunal as held under:
"5.2 Any exemption notification has to be interpreted based on the language used therein. The Supreme Court in the case of Hemraj Gordhandas v. H.H. Dave, Asst. Collector of Central Excise & Customs [1978 (2) EL.T. (J350) (S.C.)) laid down the principle as follows:-
"It is well-established that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the notification. If the tax payer is within the plain terms of the exemption it cannot be denied its benefit by calling in ald(sic) any supposed intention of the exempting authority."
The principle relating to interpretation of notification was again considered and enunciated by the Hon'ble Apex Court in the case of Mangalore Chemicals & Fertilizers Ltd. v. Dy. Commissioner reported in MANU/SC/0035/1992 : 1991 (55) E.L.T. 437 (SC) wherein the Apex Court held as follows:-
"It appears to us the true rule of construction of a provision as to exemption is the one stated by this Court in Union of India & Ors. y. Wood Papers Ltd. & Ors. MANU/SC/0454/1991 : 1991 JT (1) 151 at 155"....Truly, speaking liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction..."
10. Further, we find that the Ld. Commissioner (Appeals) has also relied upon the other decisions to this fact which makes it clear that going by the impugned interpretation of the notification respondents are entitled to the benefit of the said notification.
11. In view of the above discussion we do not find any infirmity in the impugned order which we uphold by dismissing the appeal of the Revenue and cross objections also disposed of, accordingly.
(Dictated and pronounced in the open court)
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