IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Central Excise Appeal No.5 of 2010 Commissioner, Customs & Central Excise, Meerut-I, … Appellant Versus M/s Charu Steels Ltd. … Respondent Mr. H.M. Bhatia, Advocate for the appellant None for the respondent Dated: 24.05.2011 Coram Hon’ble Barin Ghosh, C.J. Hon’ble Servesh Kumar Gupta, J. Barin Ghosh, C.J. (Oral) In terms of Industrial Policy of the Government of India, applicable, inter alia¸ to State of Uttarakhand dated 7.3.2003, the Central Excise Department of Government of India issued a notification dated 10.6.2003. Benefit of said notification dated 10.6.2003 was available, amongst others, to industries already in existence in the areas notified by the said notification dated 10.6.2003, upon increasing their installed capacity by 25 per cent. However, while effecting such increase, the existing plant and machinery have been replaced by respondent by new set of plant and machinery. In such view of the matter, the Excise Department proceeded on the basis that the respondent is not entitled to benefits of the said notification dated 10.6.2003. The matter was taken up before the Tribunal by respondent and the Tribunal has held against the Excise Department and, accordingly, present appeal has been filed by the Central Excise Department. In the matter of said notification dated 10.6.2003, the Central Board of Excise and Customs has issued a clarification on 21.1.2004. The object of the said clarification was to clarify the term ‘substantial expansion’, as referred to, amongst others, in the said notification dated 10.6.2003. In the said clarification, while it has been stated that increase in installed capacity of an existing unit by not less than 25 percent should be the result of installation of additional plant and machinery, the Clarification made it clear that the term ‘substantial expansion’ is not defined in terms of original or depreciated value of plant and machinery, and that the notification requires the only criterion to be satisfied is accretion in installed capacity by at least 2 25 percent with additional plant and machinery. The clarification, therefore, made it absolutely clear that the additional plant and machinery, referred to in notification dated 10.6.2003, was not confined only to more machinery to be added than what is in existence. It meant new plant and machinery to be installed for the purpose of increasing the capacity. If those new plants and machineries are in replacement of whole of the old plant and machinery, but the object of increasing 25 percent capacity is achieved, then in terms of the said circular itself, the industry achieving the same would come within the four corners of Notification dated 10.6.2003. We, accordingly, find no merit in the appeal and the same is dismissed. (Servesh Kumar Gupta, J.) (Barin Ghosh, C.J.) 24.05.2011 Rdang