TaxTMI 
TaxTMI 
1993 (6) TMI 237
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....engal Sales Tax Rules, 1941, having an investment on plant and machinery below Rs. 35 lakhs. Commercial production was started on and from August 16, 1989 and the first sale of its product was made on September 8, 1989. An application for certificate of eligibility was filed before the Assistant Commissioner but the application was rejected on the ground that investment on plant and machinery exceeded Rs. 35 lakhs. The Assistant Commissioner treated the heating element and water treatment plant as part of plant and machinery. The applicant preferred a revision before the Additional Commissioner against that order but the revision was rejected, confirming the order of the Assistant Commissioner. The case of the applicant is that heating element and water treatment plant should not be included in plant and machinery. Water treatment plant is alleged to be not connected with the manufacturing process. It is claimed that water treatment plant was installed for removal of excess iron from water for the purpose of making it fit for drinking. Heating element is alleged to be a consumable store which is used like an immersion rod for heating water. The life of heating element is approximat....
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.... As already stated, the application for eligibility certificate could be considered by the authorities up to September 7, 1990. Before the Assistant Commissioner concerned the applicant had claimed quite substantial amount of investment on plant and machinery to be excluded from that category for the purpose of rule 3(66a) on the obvious ground that those machineries were not directly involved in the process of manufacture. It is common ground by both the parties before us that the applicant admitted that investment on plant and machinery was to the extent of Rs. 34,14,473. The Assistant Commissioner in passing his order dated December 20, 1991 did not deal with all the items of plant and machinery shown in the books of account and audited final accounts but proceeded from the admitted position that the investment was to the tune of Rs. 34,14,473. Then he considered only two other items, namely, the heating element and water treatment plant and held that those items were to be treated as plant and machinery for the purpose of rule 3(66a). He also added the entry tax paid on imported machines amounting to Rs. 54,813. By that calculation he found the aggregate investment on plant and....
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....gued that for every year of granting or renewal of eligibility certificate there should be a fresh determination of the limit of investment on plant and machinery. He further contended that since in the explanation below rule 3(66a)(i) one of the requirements is that investment should not exceed Rs. 35 lakhs, mere production of registration certificate as S.S.I. unit would not be sufficient and the appropriate authority dealing with the prayer for eligibility certificate was competent and obliged to determine the investment. Among several requirements in the said explanation below rule 3(66a)(i) one is that the investment on plant and machinery should not exceed Rs. 35 lakhs and the second is that the unit should be registered with the Cottage and Small Scale Industries Department. The said explanation is a definition of the expression,"newly set up small-scale industry". Therefore, it is difficult to hold that mere production of S.S.I. registration certificate should be sufficient compliance of the said explanation. The appropriate Assistant Commissioner is obliged under rule 3(66a) to determine whether investment on plant exceeded Rs. 35 lakhs. It is true that no guidelines are g....
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.... several pages. He further submitted from the records that when the applicant moved a revision petition before the Additional Commissioner it did not complain about this in the grounds of revision. After perusing the impugned orders of the Assistant Commissioner and the Additional Commissioner we are of the opinion that it is not possible to say at this stage whether the Assistant Commissioner did not give the applicant an opportunity of hearing on the manner of use of the heating element and the water treatment plant. Since the applicant did not take such plea in the revision before the Additional Commissioner its present contention about violation of principles of natural justice becomes weak. In any case, in the course of hearing of the revision before the Additional Commissioner the applicantcompany had an effective opportunity for arguing its case regarding the manner of use of heating element and water treatment plant. That being the position, the present contention of violation of the principles of natural justice on this score cannot be sustained. Mr. Mehata relied on the paragraph 6 of the decision of the Supreme Court in the case of Collector of Central Excise 1979 ELT (J....
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.... the process of manufacture and is therefore a part of plant and machinery within the meaning of rule 3(66a). It may be added that the applicant has failed to show that the authorities below anywhere deviated from the relevant guidelines issued by the Government of India in the course of holding that the water treatment plant should be included in plant and machinery. We have seen that the admitted investment on plant and machinery was Rs. 34,14,473. The cost of water treatment plant is Rs. 1,07,470. That brings to a total investment of Rs. 35,21,943 and thereby their investment exceeds the prescribed limit of Rs. 35 lakhs. There is another sum of Rs. 54,813 as entry tax paid on import of machinery which has not been disputed before us by the applicant. So after that is added to the aforesaid total, it takes the aggregate sum further. In the above circumstances, we are not entering into the question whether heating element costing Rs. 1,12,200 should be treated as a part of plant and machinery or not, because even if our finding on that issue becomes favourable to the applicant, the benefit of rule 3(66a) could not still be available to it. For that reason we do not ex....