Integrated manufacturing expansion qualifies for exemption where added sheds function as part of the existing registered unit.

Additional sheds acquired after the cut-off date were treated as part of the existing registered manufacturing unit because they operated under the same management, shared registration, raw materials and workforce, and were interlinked in the manufacturing process. On those facts, the court held that the sheds represented an expansion of existing manufacturing capacity rather than new independent industrial units. Production from the additional sheds therefore remained eligible for exemption under Notification No. 69/2003-CE.

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Issues: Whether sheds acquired after the cut-off date formed part of the existing manufacturing unit so as to qualify the production therefrom for exemption under Notification No. 69/2003-CE dated 25.08.2003.

Analysis: The production facilities in the original shed and the additional sheds were under the same management, had common registration, shared raw materials and work force, and were interlinked in the manufacturing process. The additional sheds were adjacent to and connected with the pre-existing unit. On these facts, the addition of the sheds was an expansion of the existing manufacturing capacity and not the setting up of new independent industrial units after the cut-off date.

Conclusion: The additional sheds formed part of the existing manufacturing unit, and the production therefrom remained eligible for exemption.

Ratio Decidendi: Where additional sheds are integrally connected with and function as an expansion of an existing registered manufacturing unit, production from such sheds is to be treated as production of the existing unit for exemption purposes.

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