Exemption for substantial expansion turns on the effective date of enhanced capacity, not commercial production for existing units.

An exemption notification for North-East industrial units distinguished between new units and existing units undertaking substantial expansion. For new units, eligibility was linked to the date of commercial production; for existing units, clause 3(b) required substantial expansion by at least 25% in installed capacity on or after 24 December 1997, so the operative date was when the enhanced capacity became effective. Clause 4 on commercial production applied only to new units. On this reading, an existing unit whose expansion was completed before the relevant date did not qualify for the exemption.

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Issues: Whether an existing industrial unit that had undertaken substantial expansion was entitled to exemption under the North-East notifications on the basis of the date of commercial production, or whether the relevant date was the date on which the enhanced installed capacity became effective.

Analysis: The notifications distinguished between new industrial units and existing units that had undertaken substantial expansion. For new units, the date of commencement of commercial production was relevant. For existing units, clause 3(b) required substantial expansion by way of an increase in installed capacity of not less than 25% on or after 24 December 1997, so the operative date was the date on which the enhanced capacity became effective. The departmental clarification was consistent with this reading. The Court found no ambiguity in the notification language and held that clause 4, which referred to commercial production, applied only to new units.

Conclusion: The appellant's unit was an existing unit and the expansion was completed before 24 December 1997. The exemption was not available, and the appeal failed.

Ratio Decidendi: Where an exemption notification separately prescribes conditions for new units and for existing units undertaking substantial expansion, the eligibility date for an existing unit is the date on which the expanded installed capacity becomes effective, not the date of commercial production.

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