Trade Notice No.01/2010-CE
Dated Shillong, the 22nd February, 2010.
Substantial Expansion by way of increase in installed capacity for the
units availing area based exemption.
2. References have been received in the Board’s Office regarding the units manufacturing specified goods as well as non-specified goods as to whether the substantial expansion should take place only for specified goods or of overall capacity of the unit.
Following two situations have arisen in such cases:
(1) 25% expansion is undertaken only in respect of specified goods, and not overall capacity of the unit.
(2) The expansion is undertaken in respect of non-specified goods only, but overall capacity of the unit increases by 25%.
3. The issue was discussed in the Chief Commissioner's Conference held at Shillong on 30th and 31st October, 2009 and thereafter in the Board on the basis of inputs received from field formations.
The matter has been examined. The exemption notification is applicable
only to the specified goods. Therefore, the condition of substantial
expansion should also be applicable to the specified goods only.
Therefore, it is clarified that only when the substantial expansion of the
installed capacity of the specified goods is undertaken, then only the
benefit of notification would be applicable. To illustrate, if a unit is
making tobacco product (say- gutkha, a non-specified goods, which is not
allowed benefit of exemption) and also iron and steel articles ( specified
goods, which are allowed benefit of exemption), in that case, only when
units increase installed capacity of iron and steel articles by 25%,
benefit would be available. But if it increases production of gutkha by
100%, then it would not get benefit.
( S. R. Baruah)
Authority: CBEC Circular No.912/02/2010-CX dated the 22nd January, 2010
issued under F.No.101/22/2008-CX-3