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Issues: Whether the appellant unit satisfied the condition of substantial expansion by increase in installed capacity by not less than 25% so as to qualify for area based exemption under the relevant notification.
Analysis: The exemption notification applied to existing industrial units that had undertaken substantial expansion by increasing installed capacity by at least twenty-five per cent on or after 7 January 2003 and commenced commercial production from the expanded capacity within the stipulated period. The finding of the lower authorities was based on a product-wise and power-load based approach. The notification, however, did not provide that installed capacity had to be assessed product-wise or on power load. The evidence placed by the appellant, including the Chartered Engineer's certificate, Chartered Accountant's certificate, State Revenue certificate and District Industries Centre report, supported the claim of substantial expansion. A Chartered Engineer's certificate could not be disregarded casually in the absence of any contrary expert material from the Revenue. The relevant administrative clarification also contemplated examination of records and other relevant information, with consultation of the State Industries Department where needed.
Conclusion: The appellant had substantially expanded its installed capacity by more than 25%, and the denial of exemption was unsustainable.
Ratio Decidendi: For area based exemption tied to substantial expansion, installed capacity must be assessed for the industrial unit as a whole on the basis of relevant evidence, and not by an artificial product-wise or power-load formula absent from the notification.
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