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The High Court therefore concluded that the respondent could only make one composite application after five years. It should no have done so.

For one, the circular was issued subsequent to the relevant period and after the respondent had filed its revised application for exemption under Section 4A. For another, the construction put by the circular on the definition of base production is questionable and has in any event no statutory force. In any event the definition of base production in Explanation 6 which was amended in 1998 with effect from 1st April, 1990 (quoted earlier) clearly says that if the unit has been in production for less than five years, the maximum production achieved during any one of the preceding assessment years would be taken as the base production. The appellants are therefore right in contending that three separate applications were maintainable at all material times despite the fact that when such expansions were done the unit was in production for less than five years.