Valuation of plant and machinery excludes permanently dismantled assets when applying small scale industry exemption limits.

For Notification No. 89/79-C.E., the value of plant and machinery for small scale industry relief had to be computed on the machinery actually in existence at the relevant time. Permanently dismantled and removed machinery could not be included, because counting assets no longer in use would defeat the notification's object and create an anomalous valuation. The later notification expressly excluding permanently removed machinery supported the same approach under the earlier notification. The valuation therefore covered additions in existence from time to time, but excluded permanently dismantled and removed machinery, and the issue was decided in favour of the assessee.

---

---

Issues: Whether, for the purpose of Notification No. 89/79-C.E. dated 01.03.1979, the value of plant and machinery should exclude machinery permanently dismantled and removed and include only the machinery actually in existence at the relevant time.

Analysis: The notification was intended to grant relief to small scale industries whose plant and machinery did not exceed the prescribed limit. A literal reading that continued to count permanently dismantled machinery would defeat that object and produce an anomalous result. The later notification specifically provided for exclusion of permanently removed machinery, indicating that such exclusion reflected the intended basis of valuation even under the earlier notification.

Conclusion: The value of plant and machinery had to be taken as the machinery in existence from time to time, including additions but excluding permanently dismantled and removed machinery, and the issue was decided in favour of the assessee.

---