Area-based exemption continues for expanded unit where production began on time and conditions of Notification No. 50/2003-C.E. are met.

Area-based exemption under Notification No. 50/2003-C.E. continued to apply to goods manufactured from Plant-II Haridwar because the unit had commenced commercial production within the notified period and otherwise satisfied the exemption conditions. The notification did not prohibit addition or modification of plant and machinery, and Board circulars clarified that a qualifying unit could retain the benefit even after fresh plant and machinery was installed after the cut-off date. Expansion by using additional space within or adjacent to the existing premises was treated as part of the existing unit, so the exemption remained available for the residual period. Separate factory, ESI or PF registrations did not change this position.

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Issues: Whether the benefit of Notification No. 50/2003-C.E. dated 10.06.2003 was available to goods manufactured from Plant-II Haridwar established by expansion of the existing unit.

Analysis: The unit had already commenced commercial production within the notified period and satisfied the conditions for the area-based exemption. The notification did not bar addition or modification of plant and machinery, and the Board's circulars clarified that an eligible unit could continue to claim exemption despite fresh plant and machinery being installed after the cut-off date. Expansion by acquiring or using additional space within or adjacent to the existing premises was treated as akin to expansion by installing new plant and machinery within the existing unit, and the exemption continued for the residual period. Separate factory, ESI, or PF registrations did not alter this position.

Conclusion: The benefit of Notification No. 50/2003-C.E. dated 10.06.2003 was available to goods manufactured from Plant-II Haridwar established from expansion of the existing unit.

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