Job-work production counts toward expansion-unit eligibility under an industrial incentive scheme where no express exclusion exists.

Under the Rajasthan Sales Tax New Incentive Scheme for Industries, 1989, production done on job-work basis could be counted when testing whether an industrial unit qualified as an expansion unit. The scheme required increased fixed capital investment, prior utilisation of at least 85 per cent of the licensed or registered capacity, and post-expansion production exceeding the original capacity by 25 per cent, but it contained no express exclusion for job-work production. The reference to goods manufactured by the unit was treated as governing the extent of exemption on taxable sales, not as adding a further eligibility condition. The plain wording of the scheme therefore supported eligibility and entitlement to the certificate.

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Issues: Whether, for the purpose of eligibility as an expansion unit under the Rajasthan Sales Tax New Incentive Scheme for Industries, 1989, production undertaken on job-work basis can be counted towards the requirement of achieving production in excess of 25 per cent of the original licensed or registered capacity.

Analysis: The scheme drew a distinction between the conditions for becoming eligible as an expansion unit and the extent of exemption available after eligibility was established. Clause 2(f) required increased fixed capital investment, achievement of at least 85 per cent of the licensed or registered capacity before expansion, and production after expansion of at least 25 per cent in excess of the original capacity. Nothing in the scheme excluded production done on job-work from being counted towards that production threshold. The reference in the notification to goods manufactured by the unit was held to describe the extent of exemption on taxable sales and not to impose a further condition that the unit must manufacture only its own goods for eligibility. The scheme was construed according to its plain terms, and the absence of an express restriction against job-work meant such production could not be excluded. The reliance on excise case law was found inapposite because that context involved a specific exemption for job-work not present here.

Conclusion: Production on job-work basis could be taken into account for satisfying the eligibility requirement under the incentive scheme, and the assessee remained entitled to the eligibility certificate.

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