Case Law Details
Samridhi Ply Boards Pvt Ltd Vs C.C.E & S.T. Jammu & Kashmir (CESTAT Chandigarh)
CESTAT Chandigarh held that benefit of notification no. 01/10-CE dated 06.02.2010 cannot be denied as commercial production from expanded capacity commenced on or after 06.02.2010.
Facts- The appellant has a manufacturing unit situated at Village Nipora, Tehsil Kulgam, District Anantnag in the state of Jammu & Kashmir and they carried out substantial expansion of their manufacturing unit and applied for the benefits of exemption as available in Notification No. 01/10- CE dated 06.02.2010 in terms of para 8(b)(i) thereof.
The exemption was allowed by the Assistant Commissioner vide Order-in-Original dated 03.12.2015. Aggrieved by the same, the department filed appeal before the Commissioner (Appeals) contending therein that the appellant was not eligible for the benefit of exemption Notification No. 01/10- CE solely on the ground that as per the conditions of the notification, the investment in plant and machinery ought to have been made after 06.02.2010 whereas in the instant case the appellant had made substantial expansion prior to 06.02.2010 except for generator valued at Rs. 13,24,569/- which is added after 06.02.2010.
Commissioner (Appeals) vide the impugned order had set aside the Order-in-Original by accepting the appeal of the department. Being aggrieved, appellant has filed the present appeal.
Conclusion- Held that the language of the notification is very clear and the only requirement of the notification is that in order to avail the benefit of exemption is that the unit should have commenced commercial production from such expanded capacity on or after 06.02.2010 by investing 25% or more. The appellant has produced the certificate issue of the director industries Centre Anantnag vide letter No. DICA/DEV of 2013/273 whereby they have certified the date of commencement of commercial production from substantial expansion as 12.11.2012. Further, we find that there is a difference between the condition prescribed in serial no. (i) and Serial No. (ii). The department cannot import condition prescribed in another serial no. (ii) to deny the exemption to the appellant which was not present in serial no. (i) under which the appellant had availed the benefit.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
The present appeal is directed against the impugned order dated 30.03.2017 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has accepted the appeal of the Revenue and set aside the Order-in-Original dated 03.12.2015.
2. Briefly the facts of the present case are that the appellant has a manufacturing unit situated at Village Nipora, Tehsil Kulgam, District Anantnag in the state of Jammu & Kashmir and they carried out substantial expansion of their manufacturing unit and applied for the benefits of exemption as available in Notification No. 01/10- CE dated 06.02.2010 in terms of para 8(b)(i) thereof. The exemption was allowed by the Assistant Commissioner vide Order-in-Original dated 03.12.2015. Aggrieved by the same, the department filed appeal before the Commissioner (Appeals) contending therein that the appellant was not eligible for the benefit of exemption Notification No. 01/10- CE solely on the ground that as per the conditions of the notification, the investment in plant and machinery ought to have been made after 06.02.2010 whereas in the instant case the appellant had made substantial expansion prior to 06.02.2010 except for generator valued at Rs. 13,24,569/- which is added after 06.02.2010. The appellant filed cross objections before the Commissioner (Appeals) and the Commissioner (Appeals) vide the impugned order had set aside the Order-in-Original by accepting the appeal of the department. Hence, the present appeal.
3. Heard both the parties and perused the record.
4. Counsel for the appellant submitted that the impugned order denying the exemption to the appellant on the ground that Notification No. 01/10- CE prescribes the conditions that the investment in plant and machinery should have made after 06.02.2010 is wrong. The Ld. Counsel took us through the relevant para 8 of the exemption Notification and submitted that serial No. 8(i) of the Notification only talks of undertaking substantial expansion by way of increase of not less than 25% in the value of fixed capital investment in plant and machinery having commenced commercial production from such expanded capacity on or after 6th day of February, 2010.
5. He further submits that there is no condition in said para of the said Notification that the expansion should have been undertaken after 06.02.2010 but the only condition in the Notification is that the commercial production from the expanded capacity should have commenced from 6th day of February, 2010. He also submits that the very language of the notification that “have commenced commercial production from such expanded capacity on or after the 6th day of February, 2010” makes it amply clear that investment could be prior to 06.02.2010 as nobody can expand a plant by investing 25% more investment and get the date of production from his expanded capacity on the same day.
6. He also submitted that investments affected prior to 02.2010 which commences production after 06.02.2010 should be covered under its ambit and therefore the appellant has fulfilled the condition of the notification as per above said serial number as it is not disputed that the commercial production from the expanded capacity had commenced after 6th day of February, 2010. He further submits that the Commissioner (Appeals) has simply allowed the appeal of the department and rejected the claim of the appellant on the ground that some expansion was undertaken prior to 06.02.2010 but the benefit of expansion after 06.02.2010 will satisfy the condition prescribed under Notification.
7. He further submits that the Commissioner (Appeals) has taken the value of machinery as on 04.02.2007 which is irrelevant because the appellant had started their commercial production on 22.05.2004 at the first instance and therefore in any case, if the value of the plant and investment was to be taken then it ought to have been taken as on 22.05.2004 and there is no question of taking the value of plant and machinery as on 04.02.2007. He further submits that the date of production of substantial expansion is 12.11.2012 from the expanded capacity as has already been certified by the Director Industries Centre Anantnag vide Letter No. DICA/DEV of 2013/273 dated 23.01.2013.
8. He also submits that Director Industries Centre Anantnag is the proper department to certify the date of commencement of commercial production and not the Central Excise Department. He also submits that the Ld. Commissioner should have considered the plea of the appellant that as per serial no. 8(ii) the other condition for eligibility of exemption under the said notification was that the Industrial unit has made new investment on or after 06.02.2010 and such investment was directly attributable to generation of additional regular employment by not less than 25% over and above the base employment unit. He further submits that if the legislature can prescribe such condition for serial no. (ii) of the notification then they could have prescribed the same condition for serial no. (i) also if they had intended to do so.
9. He also submits that the difference between the serial no. (i) & (ii) itself clearly proves that there is no such condition of making investment in plant and machinery on or after 6th day of February, 2010 in respect of serial no. (i) of para 8 of the notification whereas such a condition was there in respect of serial no. (ii) of para 8 of the notification. He further submits that this fact itself proves that there were different conditions for availing the exemption and the department cannot import conditions prescribed in another serial number to deny the exemption to the appellant which was not present in the serial number under which the appellant had availed the benefit. He further submits that it is accepted principle of law that the notification has to be interpreted in the language written therein and nothing can be added or deleted in the notification as held in the following decisions :
(i) Gujarat State Fertilizers Co. Vers. Collector of Central Excise Reported as 1997 (91) E.L.T. (S.C)
(ii) CCE, Pondicherry Vs. CESTAT, Chennai, reported as 2016 (335) E.L.T. (Mad.)
(iii) Saravana Insulators Ltd. Vs. CESTAT, Chennai reported as 2015 (321) E.L.T. 111 (Mad).
11.He further submits that even if the investment after 06.02.20 12 is taken then the investment to the tune of Rs. 16,33,098/- has been made whereas the total investment of plant and machinery as on 31.03.2004 was Rs. 55,85,564/- which is also 29.24% of the initial investment as certified by the Chartered Accountant in his certificate dated 3 1.03.2017 annexed with the appeal.
12. On the other hand, Ld. DR defended the impugned order and submitted that the appellants are not entitled to the benefit of the Notification No. 01/10- CE dated 06.02.2010 because they have not complied with the conditions of the notification. He further submits that as per the notification any investment prior to 6th February, 2010 cannot be included towards the expansion for the purpose of this notification and the claim of the appellant is not in consonance with the provisions of the notification.
13. DR relied upon the decisions of the Apex Court in the case of Commissioner of Cus. (Import), Mumbai Vs. Dilip Kumar & Company reported in 2018 (361) E.L.T. 577 (S.C.) wherein the Hon’ble Apex Court has analyzed various decisions on the issue of interpretation of taxing statute and discussed in para 19 that “The well-settled principle is that when the words in a statute are clear, plain and unambiguous and only one meaning can be inferred, the courts are bound to give effect to the said meaning irrespective of consequences. If the words in the statute are plain and unambiguous, it becomes necessary to expound those words in their natural ordinary sense.
14. After considering the submission of both the parties and perusal of the material on record we think it appropriate to reproduce the relevant portion of the notification which is reproduced hereinbelow:
“8. The exemption contained in this notification shall apply only to the following kind of units, namely:-
(a) New Industrial units which commence commercial production on or after the 6th day of February, 2010;
(b) Industrial units existing before the 6th day of February, 2010; but which have,-
(i) undertaken substantial expansion by way of increase by not less than 25% in the value of fixed capital investment in plant and machinery for the purposes of expansion of capacity or modernization and diversification and have commenced commercial production from such expanded capacity on or after the 6th day of February, 2010
Or
(ii) made new investments on or after the 6th day of February, 2010, and such new investment is directly attributable to the generation of additional regular employment of not less than twenty-five per cent over and above the base employment limit, subject to the conditions that,-
(1) the unit shall not reduce regular employment after claiming exemption, and once such employment is reduced below one hundred and twenty-five per cent of the base employment limit, such industrial unit shall be debarred from claiming the exemption contained in this notification in future:”
15. If we analyze the provisions in serial no. 8(i) of the Notification we find that the it talks of undertaking substantial expansion by way of increase of not less than 25% in the value of fixed capital investment in plant and machinery and having commenced commercial production from such expanded capacity on or after 6th day of February, 2010. We also find that the language of the notification is very clear and the only requirement of the notification is that in order to avail the benefit of exemption is that the unit should have commenced commercial production from such expanded capacity on or after 06.02.2010 by investing 25% or more.
16. We also find that in the present case, the appellant has produced the certificate issue of the director industries Centre Anantnag vide letter No. DICA/DEV of 2013/273 whereby they have certified the date of commencement of commercial production from substantial expansion as 12.11.2012. Further, we find that there is a difference between the condition prescribed in serial no. (i) and Serial No. (ii). The department cannot import condition prescribed in another serial no. (ii) to deny the exemption to the appellant which was not present in serial no. (i) under which the appellant had availed the benefit.
17. The commissioner (Appeals) seems to have imported condition of serial no. (ii) in serial No. (i) of Notification No. 01/10- CE dated 06.02.2010 which is not legally permissible. The appellant’s case is covered vide Sr. No.(i) of the Notification. We also take note of the accepted principle of law that notification has to be interpreted in the language written therein and nothing can be added or deleted in the notification.
18. Further, we also find that the investment made by the appellant after 31.03.2004 is to the tune of 29.24% as certified by the Chartered Accountant in the certificate dated 31.03.2017 which is on record.
19. In view of these facts and circumstances, we are of the considered opinion that the appellant is entitled to the benefit of exemption Notification No. 01/10- CE and denial of the same by the Commissioner (Appeals) is set aside by allowing the appeal of the appellant with consequential relief, if any.
(Order pronounced in the open court on 20.10.2023)
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