Fresh NRI-backed investment requirement prevents reuse of the same capital for a separate exempt industrial unit.

Where an exemption notification grants Non-Resident Dealer status only for a new industrial unit supported by fresh NRI-backed capital with the required equity participation and lock-in, the same investment cannot be reused after it has already been utilised for an earlier unit. The record showed that the petitioner had already obtained the benefit for the Saw Pipe Division, while the SPEC division was treated as a separate unit but was not shown to be backed by fresh NRI investment made before commencement of production. The refusal to recognise the SPEC division for exemption was therefore justified, and the assessments based on that denial remained undisturbed.

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Issues: Whether the petitioner was entitled to recognition as a Non-Resident Dealer for the SPEC division under the exemption notification, and whether the NRI investment already used for the Saw Pipe Division could be relied upon again for the new SPEC division.

Analysis: The notification required a new industrial unit to be separately registered, independently established, and backed by capital investment in which NRI participation was at least 26% of the equity invested by private promoters, with the equity to be retained during the prescribed lock-in period. The petitioner had already secured the benefit of Non-Resident Dealer status for the Saw Pipe Division on the basis of the earlier NRI investment. The SPEC division was treated in the record as a separate unit with separate registration and eligibility certificates, and the materials showed that the additional investment relied upon for SPEC was not demonstrated as fresh NRI investment made before commencement of production. The notification did not permit the same NRI investment to be reused for another unit after the benefit had already been exhausted for the earlier unit.

Conclusion: The petitioner was not entitled to be recognised as a Non-Resident Dealer for the SPEC division, and the refusal to grant the exemption was / justified against the petitioner.

Final Conclusion: The challenge to the denial of exemption for the SPEC division failed, and the tax assessments based on that denial remained undisturbed.

Ratio Decidendi: Where an exemption notification conditions benefit on fresh NRI-backed investment in a new industrial unit, the same investment already utilized to secure the benefit for an earlier unit cannot be recycled to claim the identical status for another separate unit.

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