Sales tax exemption limited to certified installed capacity; excess production remains taxable absent lawful enhancement

Sales tax exemption under the industrial policy was confined to production within the industrial unit's certified installed capacity. Production in multiple shifts did not expand that limit, and the exemption could not be extended to quantities produced beyond the capacity stated in the registration and eligibility certificates unless the capacity had been lawfully enhanced through expansion, modernisation, or diversification. The clarification relied on by the taxpayer did not establish any wider entitlement. Excess production was therefore held taxable, and the assessment challenge failed.

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Issues: Whether sales tax exemption under the industrial policy and rate chart extended to production beyond the certified installed capacity of the industrial unit.

Analysis: The unit was entitled to exemption only within the installed capacity certified in the eligibility documents. Excess production could occur in more than one shift, but that circumstance did not enlarge the exemption, as the capacity fixed in the registration and eligibility certificates was not shown to have been validly altered by expansion, modernization, or diversification. The clarification relied upon by the petitioner did not establish any entitlement to exemption for the additional quantity produced beyond the certified limit.

Conclusion: The excess production of 1670 MT was not eligible for sales tax exemption and was exigible to tax.

Final Conclusion: The challenge to the assessment failed, and the tax liability on the excess production was upheld.

Ratio Decidendi: Sales tax exemption attached only to production within the certified installed capacity, and excess production did not qualify for exemption unless the certified capacity was lawfully enhanced.

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