V. Rajamanickam, Member (T)

1. The appeal is for allowing the benefit of the exemption under Notification No. 77/83 dated 01-03-1983 applicable to Small Scale Industries in the calculation of the value of the Capital investment on Plant & Machinery installed in the industrial unit.

2. The appellants are manufacturers of 'Barrium Carbonate and Sodium Sulphide' and have registered themselves with the Department of Industries as a Small Scale Industry with capital investment of Rs. 16,49,360.58 ps. The Department has, however, worked out the capital investment on Plant & Machinery as Rs. 23,31,439.75 ps. Against the order of the Collector, the appellants have contested the finding on the capital investment of Rs. 20,35,313.40, after conceding to some of the exclusions, which the Collector has allowed as being incorrect, on the following grounds :-

(i) There was error in the arithmetical calculations;

(ii) Inclusion of the value of six driers which were dismantled and amount of Rs. 84,494 qualifies for deduction;

(iii) The cost of civil works, viz. overhead tank water pump and water tank to the value of Rs. 36,425 and structural to be excluded from the capital investment;

(iv) Cost of 6 motors to the tune of Rs. 39,893.20 is not liable to be included as per guidelines issued by the Small Scale Industries, Andhra Pradesh;

(v) Cost of civil constructions of 11 miscellaneous items to be excluded;

(vi) The inclusion of Rs. 1 lakh paid for technical know-how should be excluded;

(vii) There was no justification for invoking the extended period when the officers had been visiting the factory a number of times and calling for piecemeal information.

3. Shri C. Sarbheshwar Rao, Ld. Consultant, appearing on behalf of the appellant has drawn attention to the Explanation I of the Notification No. 77/83-C.E., dated 1-3-1983 and stressed that value of the investment made on Plant and Machinery which have been removed permanently from the industrial unit or rendered unfit for any use shall be excluded from such determination. This was with reference to the six driers which were dismantled. The Certificate of the department of Small Scale Industries should be accepted. The case law covering this aspect was referred to in 1979 ELT (J-105) with regard to Prem Cables Pvt. Ltd., that the certificate issued to the appellant as being registered as a small-scale industrial unit should be accepted. The decision of the Tribunal in Collector of Central Excise, Madurai v. M/s. Maharaja Paper Board (P) Ltd., Maharajapuram in MANU/CE/0223/1985 : 1986 (23) ELT 484 (Tribunal) which advocates that norms fixed by the Central Government have been followed by State Government and also the Director of Industries and Commerce and hence registration small-scale industries would render the unit eligible for the concessional notification under the Industries (Development and Regulation) Act, 1951.

That in respect of the various electrical equipment, the amount of Rs. 78,594/- is to be excluded as per the guidelines issued by the Development Commissioner, Small Scale Industries, Govt. of India.

The cost of six motors valued at Rs. 39,893.20 also to be excluded as per the general guidelines issued by the Development Commissioner.

The amount of Rs. 1,00,000/- paid to Shri Sankara Reddy for installation of the machinery, supervision charges and technical know-how has to be excluded as per the decision of the Tribunal in MANU/CE/0032/1984 : 1984 (16) ELT 560 - M/s. Ahmedabad Chemicals Pvt. Ltd. v. Collector of Central Excise, Baroda:

"Capital investment on Plant & Machinery - Expenses for accessories, electric installations, erection etc. not includible - Notification Nos. 89/79-C.E. and 105/80-C.E. and Item 68 of Central Excise Tariff. The contention that the capital investment on plant and machinery of the 'industrial unit' where such goods are manufactured would be inclusive of all expenses such as other accessories, electric installation, erection charges etc.