Production incentive eligibility turns on actual output; unproved job work cannot be added to meet the required increase.

Eligibility under the Sales Tax New Incentive Scheme depended on an actual 25% increase in production from the original licensed or registered capacity. Job work could not be counted unless it was shown to fall within the scheme's concept of production. Because the record did not establish the nature of the job work or prove that it qualified as production for incentive purposes, the assumption that it could be aggregated with the assessee's own output was unsustainable. The claim for an Eligibility Certificate therefore failed, and the Revenue succeeded.

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Issues: Whether, for the purpose of clause 2(f) of the Sales Tax New Incentive Scheme for Industries, 1989, job work undertaken by the assessee could be added to its own production so as to satisfy the requirement of an increase in production of at least 25% of the original licensed or registered capacity and qualify for an Eligibility Certificate.

Analysis: The scheme treated expansion as an increase in fixed capital investment accompanied by an increase in production of at least 25% of the original capacity, and eligibility depended on actual production by the unit. The record did not establish the nature of the job work undertaken, and neither the Tax Board nor the High Court examined whether such work amounted to production contemplated by the scheme. In the absence of material showing that the job work could be treated as production for the purpose of the incentive, the assumption that it should be aggregated with the assessee's own production was held to be unsustainable.

Conclusion: Job work could not be mechanically added to the assessee's own production for the purpose of clause 2(f); the claim for Eligibility Certificate was not maintainable. The appeals succeeded in favour of the Revenue.

Ratio Decidendi: Under an incentive scheme requiring a specified increase in production for eligibility, only actual production falling within the statutory or notified concept of production can be counted, and a claim cannot be sustained on presumptions about job work in the absence of proof that such work answers that description.

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