Plant and machinery investment must include all qualifying machines for substantial expansion exemption under the notification.

A machine forming part of plant and machinery must be included in the investment base for determining substantial expansion under Notification No. 01/2010-CE. The HSD machine was treated as a grinder and part of the plant and machinery, so its cost had to be counted; once included, the investment exceeded the 25% threshold and the exemption condition was satisfied.

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Issues: Whether the appellant had made the requisite substantial expansion by investing more than 25% in plant and machinery so as to qualify for exemption under Notification No. 01/2010-CE dated 06.02.2010.

Analysis: The disputed reduction made by the Commissioner (Appeals) excluded the HSD machine from the investment base. The machine was found to be a grinder and part of the plant and machinery. Once its cost was included, the total investment towards expansion came to Rs. 164.69 lakhs, which exceeded the 25% threshold required for substantial expansion under the notification.

Conclusion: The appellant satisfied the condition of substantial expansion and was entitled to the benefit of Notification No. 01/2010-CE dated 06.02.2010.

Final Conclusion: The impugned denial of exemption was set aside and the appeal succeeded with consequential relief.

Ratio Decidendi: A machine forming part of plant and machinery must be included in the investment computation for substantial expansion when determining eligibility for exemption under the notification.

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