Substantial expansion qualifies for exemption where installed capacity increases and the manufactured goods remain the same.

Exemption under Notification No. 32/99-CE was available where the facts showed substantial expansion of installed capacity for the specified goods. The manufactured product remained unchanged whether produced by the single-layer or multi-layer machine, and both were classified under the same tariff heading. The record also showed enhanced production capacity through installation of additional machinery, supported by certificates from other authorities confirming an increase in annual production capacity. Circular No. 912/02/2010-CX was applied consistently with this position, clarifying that exemption depends on substantial expansion in the capacity of the specified goods. On those facts, the appellant was held eligible for the exemption.

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Issues: Whether the appellant was entitled to the benefit of Notification No. 32/99-CE on account of substantial expansion of installed capacity.

Analysis: The manufactured product remained the same whether produced by the single-layer machine or the multi-layer machine, and both fell under the same tariff heading. The record showed enhancement of production capacity through installation of additional machinery, supported by certificates from other authorities indicating increase in annual production capacity. The clarification in Circular No. 912/02/2010-CX, that exemption is available when substantial expansion is made in the capacity of the specified goods, supported the appellant's case on the facts found.

Conclusion: The appellant was eligible for the exemption under Notification No. 32/99-CE.

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