Installed capacity increase governs exemption eligibility under Notification No. 50/2003-C.E.; unsupported contrary findings cannot stand.

Exemption under Notification No. 50/2003-C.E. depended on proof of the prescribed 25% increase in installed capacity. The Tribunal considered certificates from the District Industries Centre and a Chartered Engineer, together with the Revenue's technical explanation on the production-capacity formula, and held that the finding of no requisite capacity expansion was unsustainable on that record. The denial of exemption on the ground of absence of the required expansion could not be maintained, and recovery was stayed during pendency of the appeals.

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Issues: Whether the appellant had achieved the requisite 25% increase in installed capacity so as to qualify for exemption under Notification No. 50/2003-C.E.

Analysis: The dispute turned on whether the claimed expansion was supported by reliable evidence and whether the increase in installed capacity, rather than any broader test of substantial expansion, satisfied the notification. The record included certificates from the District Industries Centre and a Chartered Engineer, and the Tribunal also considered the technical explanation offered on behalf of the Revenue regarding the production-capacity formula. On that material, the finding that no requisite capacity expansion had taken place was found unsustainable.

Conclusion: The issue was answered in favour of the assessee, and the denial of exemption on the ground of absence of the required capacity expansion could not be sustained.

Final Conclusion: The order declined to uphold the demand and granted interim protection by staying recovery during the pendency of the appeals.

Ratio Decidendi: For exemption under the notification, the decisive test is the increase in installed capacity by the prescribed extent, and a contrary finding must rest on reliable evidence showing that such increase did not occur.

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