Overall installed capacity increase can sustain exemption despite no expansion in one section.

Notification No. 32/99-C.E. did not require expansion in every section of a manufacturing unit; an overall increase in installed capacity was sufficient for exemption. Where the assessee showed about 25% overall expansion through additions in the spinning and processing sections, supported by engineering and departmental certifications, the absence of expansion in the weaving section alone did not defeat eligibility. The Revenue's objection based only on one unchanged section was rejected, and the exemption benefit remained available.

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Issues: Whether the assessee was entitled to the benefit of Notification No. 32/99-C.E. despite no expansion in the weaving section, when the manufacturing unit as a whole had achieved an overall increase in installed capacity.

Analysis: The notification did not require increase in each and every section of the unit. The Tribunal noted that the assessee had established an overall expansion of installed capacity by about 25% through additions in the spinning and processing sections, supported by engineering and departmental certifications. Since the Revenue did not dispute the overall increase, the absence of expansion in the weaving section alone was not a ground to deny the exemption.

Conclusion: The assessee was held entitled to the benefit of the exemption notification, and the Revenue's appeal was rejected.

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