The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), granted exemption on investment in plant and machinery and observed that the excise notification has to be interpreted in language written.
The appellant, M/s Samridhi Ply Boards Pvt Ltd, has a manufacturing unit situated in the state of Jammu & Kashmir and they carried out substantial expansion of their manufacturing unit and applied for the benefits of exemption as available in Notification No. 01/2010-CE dated 06.02.2010 in terms of para 8(b)(i) thereof. The exemption was allowed by the Assistant Commissioner vide Order-in-Original dated 03.12.2015.
Aggrieved by the same, the department filed appeal before the Commissioner (Appeals) contending therein that the appellant was not eligible for the benefit of exemption Notification No. 01/2010-CE solely on the ground that as per the conditions of the notification, the investment in plant and machinery ought to have been made after 06.02.2010 whereas in the instant case the appellant had made substantial expansion prior to 06.02.2010 except for generator valued at Rs. 13,24,569/- which is added after 06.02.2010.
The counsel for the appellant submitted that the impugned order denying the exemption to the appellant on the ground that Notification No. 01/2010-CE prescribes the conditions that the investment in plant and machinery should have made after 06.02.2010 is wrong.
It was further submitted that there is no condition in said para of the said Notification that the expansion should have been undertaken after 06.02.2010 but the only condition in the Notification is that the commercial production from the expanded capacity should have commenced from 6th day of February, 2010.
On the other hand, the Departmental Representative defended the impugned order and submitted that the appellants are not entitled to the benefit of the Notification No. 01/10-CE dated 06.02.2010 because they have not complied with the conditions of the notification and further submitted as per the notification any investment prior to 6 th February, 2010 cannot be included towards the expansion for the purpose of this notification and the claim of the appellant is not in consonance with the provisions of the notification.
A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “We also find that the language of the notification is very clear and the only requirement of the notification is that in order to avail the benefit of exemption is that the unit should have commenced commercial production from such expanded capacity on or after 06.02.2010 by investing 25% or more.”
The Bench further noted that the Commissioner (Appeals) seems to have imported condition of serial no. (ii) in serial No. (i) of notification No. 01/10- CE dated 06.02.2010 which is not legally permissible. The appellant’s case is covered vide Sr. No.(i) of the Notification.
“In view of these facts and circumstances, we are of the considered opinion that the appellant is entitled to the benefit of exemption Notification No. 01/10-CE and denial of the same by the Commissioner (Appeals) is set aside by allowing the appeal of the appellant with consequential relief, if any” the Bench concluded.
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