Substantial expansion test under exemption notification applied to the industrial unit as a whole, not isolated machinery.

Eligibility for exemption under Notification No. 33/99-C.E. turned on whether the industrial unit had undergone substantial expansion by at least 25% in installed capacity. The report relied on by the adjudicating authority showed substantial expansion of the unit as a whole, and the notification was read as requiring expansion of the industrial unit generally, not of any individual section or particular machinery. The argument that only the capacity of the bottle washer and filler should be considered was rejected. The respondent was therefore held entitled to the notification benefit, and the Revenue's challenge failed.

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Issues: Whether the respondent was entitled to the benefit of Notification No. 33/99-C.E. on the ground that its industrial unit had undergone substantial expansion by increase in installed capacity of not less than 25%.

Analysis: The report relied upon by the adjudicating authority showed a substantial expansion of the industrial unit. The notification required substantial expansion of the industrial unit as such, and did not confine the test to any individual section or particular machinery. The contention that only the capacity of bottle washer and filler was relevant was therefore rejected.

Conclusion: The respondent was held eligible for the benefit of the notification, and the challenge by the Revenue failed.

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