TaxTMI 
TaxTMI 
2015 (10) TMI 622
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....lled capacity of 3,68,440 cylinders. During December, 2002, this company set up another unit in the same compound for manufacture of ACSR conductors and for this purpose procured old and used plant and machinery. According to the appellant, there was trial production of certain quantity of conductors during the October, 2002 to December, 2002 which was cleared on payment of duty. 1.2 On 10.6.2003, exemption notification No.50/03-CE dated 10.6.03 was issued which exempted the goods other than those mentioned in the Annexure I to the Notification and cleared from a unit located in the areamentioned in the Annexure II of the notification from the whole of Central Excise duty leviable under section 3 of Central Excise Act, 1944 and Additional excise duty leviable under Additional Duties of Excise (Goods of Special Importance) Act,1957 [AED (GSI)] and Additional Duties of Excise (Textiles and Textile Articles) Act, 1978[AED(T&TA)]. This exemption notification was amended by Notification No.27/05-CE dt.19.5.05 by which in addition to some changes, Annexure III was also added. The exemption notification No.50/03-CE, as amended by Notification No.27/05-CE was applicable to two types of ....
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....after 7/1/2003. Another objection of the department is that khasra numbers on which the factory is located are not specified in Annexure II of the notification against the Village "Camp Road, central Hope Town". It is on this basis that show cause notices were issued to the appellant company for demand of duty totalling Rs. 65,70,41,629/- in respect of clearance of LPG cylinders and conductors during the period from 1.7.2003 to 1.12.2012alongwith interest and imposition of penalty on the appellant company under section 11AC read with Rule 25(1), and also on the directors of the company namely, Shri Gyan Chand Goyal, Shri Arun Goyal and Shri Ankit Garg under Rule 26. 1.7. The show cause notices were adjudicated by the Commissioner vide four Orders-in-Original dated 22/6/2006,13/2/2006,31/1/2012 and 8/8/2013 by which the above mentioned duty demands totalling Rs. 65,70,41,629/- were confirmed alongwith interest and besides this, penalty of equivalent amount was also imposed on the appellant company under section 11AC and penalty of Rs. 10,000/- each were imposed on each Shri Gyan Chand Goyal Shri Arun Goyal and Shri Ankit Garg under Rule 26 of the Rules. This penalty o....
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....rtment on 11/7/2003, that both unit are independently eligible for exemption under Notification No.50/03-CE, that the khasra nos. of the plot of land on which the factory is located were mentioned against 'Selakui Industrial Region' of Tehsil Vikasnagar, District Dehradun in Annexure II of the Notification No.50/03-CE even before the amendment by Notification No.27/05-CE and therefore, the department's contention that Khasra nos. of the plot of land on which the factory is located were not mentioned under Notification No.50/03-CE during the period prior to 19/5/05 is not correct, and that in view of above submissions, the impugned order is not correct. 4. Shri Yashpal Sharma, learned DR, defended the impugned order by reiterating the findings of the Commissioner. He submitted that the conductor unit was not eligible for exemption, as it had started commercial production before 7.1.2003. With regard to the cylinder unit, he pleaded that both units conductor division as well as cylinder division have to be treated as one factory and for duty exemption under Notification No.50/03-CE to the cylinder unit, capacity expansion by 25% or more should have taken place in both ....
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....nt Centres or Export Promotion Industrial Park, or Industrial Estates or Industrial areas or Commercial Estates or Scheme Areas as the case may be specified in Annexure II and Annexure III appended thereto. The Industrial areas, Industrial estates etc. are specified in Annexure II and Annexure III. In the table appended to the notification in Annexure II and III, while the 2nd column mention the name of the Industrial area, Industrial estate etc. the 3rd and 5th columns mention the village and the Tehsil under which the Industrial area/ Industrial estate etc. falls. Column 4 mentions the khasra number of the plots of land of which the Industrial area/ Industrial estate comprises. In this case the appellants factory is located at khasra No. 235,237,238/1 and 238/2 of Selakui Industrial Region located in Tehsil Vikas Nagar, District Dehradun. Even during period prior to 19/05/05, in Annexure II under the list of Existing Industrial Estates /Region of District Dehradun "Selakui Industrial region" of tehsil vikasnagar is mentioned against S.No. 11 and against Selakui Industrial Region among the khasra numbers, the khasraNos 235 to 257 are mentioned. Therefore the factory of the ....
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....uction on or after 7/1/2003; (2) Industrial units existing before 7/1/2003, but which have undertaken substantial expansion by the way of increase in installed capacity by not less than 25%, on or after 7/1/2003. Subsequently, by amending notification No.27/05-CE dt.19/5/05, a sunset clause was introduced in Notification No.50/03-CE and accordingly the new industrial units set up in area specified in Annexure II and III for being eligible for the exemption must have "commenced commercial production on or after 7/1/03, but not later than 31/3/2010."Similarly, the industrial unit existing before 7/1/03 in area mentioned in Annexure II, which have undertaken substantial expansion by way of increase in installed capacity by not less than 25% on or after 7/1/03, for being eligible for the exemption must have commenced commercial production from such expanded capacity, not later than 31/3/2010. 8.1.1 However, in this case, we are not concerned with sunset clause introduced by Notification No.27/05-CE dt.19/5/05 but are concerned withthe "sunrise clause" i.e. which industrial unit are to be treated as new industrial unit eligible for this exemption when this exe....
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....otification, it should be construed in contradistinction with the term "Trial Production" Trial Production is followed by commercial production. Trial Production is the production during the process of commissioning of a plant. The process of commissioning of a manufacturing plant starts after completion of erection installation. During commissioning, various machinery is run on trial/test basis and if the production is not of the desired quantity and if the desired quality, the necessary adjustments are made. The running of a plant during its commissioning is only a trial run meant to make the necessary adjustments in the machinery and calibrate them to optimise their productivity. Commercial Production starts only when the commissioning i.e. trial run is complete. Though during trial run, there may be some production and the manufacturer may have sold the same, the plant cannot be said to have commenced commercial production during that phase. The plant can be treated as having commenced commercial production only after completion of trial run i.e. commissioning. 8.5 In this case from the production figures of conductor unit during Oct 02- Dec02 period, Jan 03 to March 03 peri....