TaxTMI 
TaxTMI 
2005 (2) TMI 356
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....spect of the goods imported for setting up of Crude Oil Refinery. 3.Shri J.J. Bhat, learned Sr. Advocate, accompanied by S/Shri Rohan Shah, Rajesh Chander Kumar and A. M. Dave, Advocates, appeared for the appellants and Shri M. Chandrasekaran, learned Sr. Advocate along with Shri C. Harishanker, Advocate appeared for the Revenue. 4.In order to appreciate the dispute, the brief facts of the case are given below :- The appellants set up Crude Petroleum Refinery complex at Mangalore with a licensed capacity of 9 Million Metric Tons Per Annum (MMTPA) in two phases, viz. Phase-I (3 MMTPA) and Phase II (6 MMTPA). The goods imported are for the Phase-II Crude Petroleum Refinery. According to the relevant Notification, the goods specified ....
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....s been clarified that the expansion to 9 MMTPA has been achieved by MRPL by setting up additional facilities capable of processing a further 6 MMTPA crude oil. (iv) Our attention was referred to the Ministry of Petroleum and Natural Gas by letter dated 17-3-2003 addressed to the Commissioner of Customs, Mangalore wherein it has been confirmed that MRPL has increased its refining capacity from 3 MMTPA to 9 MMTPA at Mangalore by setting up an independent stand-alone Crude Petroleum Refinery having a capacity of 6 MMTPA in addition to its existing refinery of 3 MMTPA. This clarification has been issued with an approval of Joint Secretary (Refineries) in the Ministry. (v) &n....
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....s irrelevant to the issue at hand. (x) Even if it is assumed that the impugned goods are for 'substantial expansion', the same is not inconsistent with setting up an additional refinery. The notification refers to only 'setting up' and not 'initial setting up'. Therefore, one should not read into the notification what is not that. (xi) The definition of substantial expansion under IDRA "(Industrial Development and Regulation Act), 1951 includes only setting up a new unit/undertaking. The Hon'ble Supreme Court in CIT v. Straw Board [1989 SUPP 2 SCC 523 (S.C.)] and Bajaj Tempo v. CIT [1992 (3) SCC 78 (S.C.)] has held that concessions for tax purposes to encour....
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....area. All these things indicate that there is only substantial expansion and no setting up of an additional refinery. 7.We have gone through the rival contentions. These appeals involve questions of facts and law. First, let us deal with the question of facts. The appellants contended that they have set up an additional refinery in phase II with a capacity of 6 MMTPA. They have produced enormous evidence for the same. The Ministry of Petroleum and Natural Gas clarified that the appellants have set up a second refinery which is a stand alone refinery. M/s. Engineers of India involved with the Project have also certified that the second refinery has come into existence. M/s. John Brown Technologies India (P) Ltd., after a thorough study ha....
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....which is set up in the first time and not for any additional refinery. The Notification states that the goods specified in the list 8A, required for setting up Crude Petroleum Refinery, are exempted. The Revenue introduces the word 'initial' before the words 'setting up', and interprets that the goods required for the first refinery only are entitled for the exemption. In other words, the Revenue tries to read something which is not there in the notification. This is not permissible. We also feel that it is not necessary to do hairsplitting of the phrases 'initial setting up' and 'substantial expansion' here. It is always possible to extend the capacity of any Industrial unit by setting up an additional unit. Therefore, the Revenue's interp....
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....ting up an additional refinery (B). It is not a case where 'A' excludes 'B'. This is a case where 'A' and 'B' can co-exist. The Commissioner in the Order-in-Original has not at all discussed overwhelming documentary evidence produced by the appellants to show that an additional refinery has come into existence. In Para 5 of the said order, he has discussed 'initial setting up' of a unit and substantial expansion of an existing unit/undertaking. In our view this discussion is not at all relevant for the issue in this case. The learned Commissioner has also referred to the tax behaviour of the appellant to interpret the notification. In our view, such extraneous consideration should not influence the interpretation of an exemption notificatio....