Case: Commnr. Of Central Excise, Shillong Vs. M/S. North Eastern Tobacco Ltd

of the Additional Duties of (Textile and Textile Articles) Act, 1978 (40 of 1978), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the good specified in the first schedule and the second schedule to the Central Excise Tariff Act, 1985 (1 of 1986) and cleared from unit located in the Growth Centre or Integrated Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate, as the case may be specified in Annexure appended to this notification, from so much of the duty of excise or additional duty of excise, as the case may be, leviable thereon under any of the said Acts as is equivalent to the amount of duty paid by the manufacturer of goods from the account current maintained under rule 9 read with rule 173 G of the Central Excise Rules 1944. The exemption contained in this notification shall apply only to the following kind of units namely:- (i) New industrial units which have commenced their commercial production on or after the 24th day of December, 1997. (ii) Industrial units existing before the 24th Day of December, 1997 but which have undertaken substantial expansion by way of increase capacity by not less than twenty five per cent on or after the 24th day of December, 1997. The exemption contained in this notification shall apply to any of the said units for a period not exceeding ten years from the date of publication of this notification in the Official Gazette on from the date of commencement of Commercial production whichever is later. (Underlying for inviting pointed attention) 9. The Exemption Notification nowhere defines the words new industrial units. The object of Exemption Notification is obvious. It intends to encourage capital investment and establishment of industrial units in specified North-Eastern States for the purpose of increasing production of goods, promoting development of industry and employment in the said regions. In the case of Hindustan Aluminium Corp. Ltd. vs. State of U.P. and Another (1981 (3) SCC 578 ), this Court emphasised that the Notification issued under the Act, should not only be confined to its grammatical meaning or ordinary parlance but it should also be construed in the light of the context. It was reiterated that the expression should be construed in a manner in which similar expressions have been employed by those who framed relevant notifications. Therefore, there is a need to derive the intent from a contextual scheme. 10. The another important principle of interpreting an Exemption Notification is that as far as possible liberal interpretation should be imparted to the language thereof, provided no violence is done to the language employed. She State Level Committee vs. Morgardshammar India Ltd. (1996 (1) SCC 108 ). 11. In the case of Morgardshammar India Ltd. (Supra), Section 4(A) of the U.P. Sales Tax Act contained definition of new unit for availing exemption from payment of sales tax. Explanation below Section 4(A) of the U.P. Sales Tax Act defined new unit to mean a factory or workshop whether set up by a dealer already having an industrial unit manufacturing the same goods at any other place in the State or adjacent site but excluded any factory or workshop using machinery, accessories or components already used or acquired for use in any other factory or workshop in India. In the present case, no such definition or explanation is to be found in the notification and there is no material to establish that the same machinery, accessories or components used by the company in its unit at Bangagarh have been shifted for its unit at Amingaon, Guwahati. 12. In the case of Shri Bakul Oil Industries vs. State of Gujarat (1987) (1) SCC 31 ), the notification for exemption from sales tax under consideration was issued under the provisions of Gujarat Sales Tax Act and in the notification new industry was defined to mean and include an industry commissioned during the period 1st April, 1970 to 31st March, 1975 but the exclusion clause clearly read as : but shall not include such industrial undertaking established by transferring or shifting or dismantling an existing industrial unit. 13. In the case before us, the Exemption Notification does not define new industrial unit to exclude from its ambit which are shifted or transferred from one location to another. 14. In the present case as we have found above, there was no material before the Department that pursuant to the Disinvestment Agreement with AIDC, the unit of the company at Bangagarh which was closed in 1994 was shifted to the new location at Amingaon, Guwahati. 15. The unit at Amingaon, therefore, has to be considered as a new unit for the purposes of the Notification to avail exemption. The other argument advanced by the counsel on behalf of the Department does not impress us at all that the words new industry in Exemption Notification has to be construed in the light of the provisions of Industries (Development & Regulation) Act and since the company itself asked for use of same industrial licence by endorsement for the changed location, the unit at Amingaon was not a new unit. In our considered opinion, merely because the company has made an attempt to continue its industrial activities at the new location on the basis of same industrial licence granted for its earlier location, it cannot be denied the benefit of Exemption Notification. The claim of the company of the status of its factory at Amingaon as new unit within the intent and meaning of the Exemption Notification has rightly been accepted. The attempt of the company to obtain endorsement on the same industrial licence for its industrial activity at the new location or requirement of grant of a fresh industrial licence to them at the new location under the Industries (Development & Regulation) Act, is a subject matter not directly connected with grant of benefit of the exemption notification under the Act.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]We do not find any ground to interfere with the decision of the CEGAT and its conclusion that the unit of the company at Amingaon is entitled to the benefit of the Exemption Notification9. The Exemption Notification nowhere defines the words new industrial units. The object of Exemption Notification is obvious. It intends to encourage capital investment and establishment of industrial units in specifiedn States for the purpose of increasing production of goods, promoting development of industry and employment in the said regions10. The another important principle of interpreting an Exemption Notification is that as far as possible liberal interpretation should be imparted to the language thereof, provided no violence is done to the language employed11. In the case of Morgardshammar India Ltd. (Supra), Section 4(A) of the U.P. Sales Tax Act contained definition of new unit for availing exemption from payment of sales tax. Explanation below Section 4(A) of the U.P. Sales Tax Act defined new unit to mean a factory or workshop whether set up by a dealer already having an industrial unit manufacturing the same goods at any other place in the State or adjacent site but excluded any factory or workshop using machinery, accessories or components already used or acquired for use in any other factory or workshop in India. In the present case, no such definition or explanation is to be found in the notification and there is no material to establish that the same machinery, accessories or components used by the company in its unit at Bangagarh have been shifted for its unit at Amingaon, Guwahati14. In the present case as we have found above, there was no material before the Department that pursuant to the Disinvestment Agreement with AIDC, the unit of the company at Bangagarh which was closed in 1994 was shifted to the new location at Amingaon, Guwahati