TaxTMI 
TaxTMI 
2016 (1) TMI 521
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....mption under Notification No. 50/2003-CE dated 10/6/03. The installed capacity of the unit prior to 07/01/2003 was 15 Ton Per Day (TPD) or 4500 TPA in respect of Paper Board and 5 Ton Per Day of 1500 TPA in respect of the Spiral Paper Tube. The respondent claimed that after expansion of the unit the installed capacity of the Paper Board has increased from 15 TPD to 25 TPD. It was also informed that the respondent has not undertaken any expansion in respect of Spiral Paper Tube. A show cause notice issued to the respondent on the allegation that the installed capacity of Spiral Paper Tube has not been increased, therefore, the respondent has failed to make substantial expansion under notification as expansion occurring in the notification means the installed capacity in relation to each and every item being manufactured by existing industrial relate. The show cause notice was adjudicated and it was held that respondent has undertaken substantial expansion by way of increase in installed capacity by more than 25%, therefore, the respondent is entitled for benefit of exemption notification cited hereinabove. The said order was challenged before the learned Commissioner (Appeals) who u....
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....capacity of 5 TPD, therefore, there was a total production capacity of the factory was 20 TPD. After expansion in Paper Board unit, the total installed capacity has been increased to 30 TPD which is more than 25% of the installed capacity prior to substantial expansion. On this ground itself, the Revenue has not case, but in the impugned order the learned Commissioner (Appeals) before allowing the exemption, has examined the issue of substantial expansion in detail and observed as under :- "6. The Department has preferred this appeal on the ground that the Notification No. 49/2003 and 50/2003 (supra) lays down the expansion in installed capacity of an Industrial Unit and do not provide expansion product wise. Secondly exemption to an Industrial Unit is available only when there is substantial expansion of installed capacity by not less than 25%. In this case the unit is manufacturing two different specified products and expansion has been undertaken for manufacturing of only one specified product by the unit, therefore, it cannot be treated as substantial expansion of installed capacity as per notification. The Circular issued by CBEC vide 772/5/2004-CX dated 21/....
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....lso. Since they opted to pay duty on Spiral Paper Tube, therefore, the Department raised the Demand against them on the ground that substantial expansion ought to have been carried out in each and every section. (iv) That the notification in dispute grant exemption to the goods cleared from a unit and not to the goods cleared from a factory. Thus the exemption is neither granted to a manufacturer nor is the exemption factory specific. Therefore, the Paper Board division in which substantial expansion has been carried out by them is in industrial unit and hence exemption availed by them was in accordance with law. They averred that the impugned notification makes a distinction between a factory and an industrial unit. The word "factory" is a genus and "industrial unit" is a species comprising of various divisions of a factory. (v) That factory has been defined under Section 2 (3) of the Central Excise Act, 1944. All industrial units are to be considered as parts of the factory whereas a factory cannot be a part of industrial unit. Thus the Paper Board division of their will be considered as an industrial unit within the factory. (vi) Thei....
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....tment is contrary to the above judgments and binding Board Circular is therefore liable to be rejected. I have gone through the grounds of appeal preferred by the Department, the written submissions of the party, copies of relevant documents available on record and the record of personal hearing. I find that the gist of the Department's appeal is that party has not carried out substantial expansion in their unit's each section or to say that though installed capacity of Paper Board Section has been enhanced by the party by more than 25%, yet they have made no increase in installed capacity of their Spiral Paper Tube Section. As regards to party's averment that the appeal filed by the Department is time barred in terms of Section 35E of the Central Excise Act, 1944 as no justifiable reasons have been brought forth in the Order in Review passed by the Commissioner is also the appeal filed by the Department, for reviewing the order within the period of six months, the appeal filed against the Order-in-Original No. 18/Addl./Commr./M-II/2005 dated 18/08/2005 and the same is beyond the period specified under the Act as impugned Order-in-Original was passed on 1....
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....e unit the installed capacity of Paper Board has increased from 15 TPD to 25 TPD. This claim of the party is certified by the experts of Department of Paper Technology, IIT, Roorkee vide their report dated 22/03/2005 as manifest from the Capacity Assessment Report available on record. Thus as a whole, their installed capacity also increased by more than 25% (from 15+5=20 TPD to 25+5=30 TPD). (ii) In the case of CCE vs. Monabari Tea Estate reported in 2003 (154) E.L.T. 230, it was held by the Hon'ble CESTAT that there is nothing in the notification to suggest that there should be an increase in each and every section of the manufacturing unit. If there is overall increase of 25%, the same would meet the conditions of Notification No. 33/99 (Area Based Notification for Jammu & Kashmir). (iii) In the case of CCE vs. Assam Polyester Co-op Society Ltd. reported in 2003 (162) E.L.T. 350 it was held by the Hon'ble CESTAT held that the Revenue in their memo of appeal has contended that there has been no expansion of installed capacity of weaving section. Weaving section, being an integral part of process of manufacture, the non-expansion in the said section wi....
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....p;(vi) CCE vs. Hindustan Coca Cola Beverages Ltd. reported in 2005 (186) E.L.T. 242, wherein the Hon'ble CESTAT had held that "Expansion of Notification No. 33/99-CE - Bottle washer and filter installed in aerated water bottling plant" Commissioner accepted the reliance of respondent stating that there has been substantial expansion of the industrial unit by of increase in installed capacity As per the notification there should be substantial expansion in industrial unit and the expansion should not be regarding to any individual section of the unit or machinery in the unit Benefit of exemption available. Appeal rejected. (vii) CCE vs. Dorria Tea Estate reported in 2003 (156) E.L.T. 999, wherein Hon'ble CESTAT had held that "after going through the appeal memos filed by the Revenue, we find that there is no evidence on record to rebut the above findings of the Commissioner (Appeals). The Revenue has nowhere contended that the production capacity as reflected in the impugned order by the Commissioner (Appeals), does not show an increase of 25%. Similarly, it is seen that the Revenue has accepted that there is an increase of 25% in the overall installed cap....