Substantial expansion exemption under Notification No. 01/2010-CE applies when expanded production starts after the specified date.

Exemption under Notification No. 01/2010-CE was available to industrial units existing before 06.02.2010 that undertook substantial expansion by increasing fixed capital investment in plant and machinery by at least 25% for expansion, modernisation or diversification, and commenced commercial production from the expanded capacity on or after that date. On the facts stated, the unit had made the required investment and began commercial production after 06.02.2010. Applying the plain terms of the notification, the unit satisfied the prescribed conditions and was entitled to the exemption benefit.

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Issues: Whether the respondent was entitled to exemption under Notification No. 01/2010-CE dated 06.02.2010 on the basis of substantial expansion and commencement of commercial production after 06.02.2010.

Analysis: The notification applied to industrial units existing before 06.02.2010 that had undertaken substantial expansion by increasing fixed capital investment in plant and machinery by not less than 25% for expansion, modernization or diversification, and had commenced commercial production from the expanded capacity on or after 06.02.2010. The respondent had invested the required amount and commenced commercial production after the relevant date. The exemption had to be construed according to the plain terms of the notification.

Conclusion: The respondent satisfied the conditions of the exemption notification and was entitled to its benefit.

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