Capital investment under exemption notification must use face value, with no abatement for unfit machinery; valuation items were remanded.

Capital investment under Notification No. 89/79-C.E. had to be computed on the face value of the plant and machinery installed in the factory, so no abatement was allowed merely because some machinery had become unfit for use. However, the valuation adopted by the Department, including amounts drawn from income-tax returns and the treatment of repairs and maintenance, required fresh examination. The face-value method was therefore upheld, but the assessment was set aside on the disputed valuation components and remanded for reconsideration.

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Issues: Whether, for computing the capital investment in plant and machinery under the exemption notifications, the face value of the investment alone was to be taken into account without allowing abatement for machinery rendered unfit for use, and whether repairs and maintenance were includible in the investment figure.

Analysis: On a plain reading of Notification No. 89/79-C.E., the computation of capital investment was to be based on the face value of the investment made from time to time in the plant and machinery installed in the factory. On that basis, no abatement was permissible merely because some machinery had been rendered unfit for use. At the same time, the valuation adopted by the Department, particularly the inclusion of amounts reflected from income-tax returns, and the treatment of repairs and maintenance, required reconsideration.

Conclusion: The face-value method was upheld and no deduction was allowable for machinery rendered unfit for use, but the assessment was set aside for fresh consideration on the disputed valuation components and the matter was remanded.

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