Dear Piyush ji,
Your query made me restless and therefore compelled me to reply today itself.
My point wise reply to your query, in my view, is as under:
Point No. 1 : If the Factory has been constructed between 2002 - 2007 do we need to pay cess on this construction?
My Reply : If the Factory has been constructed between 2002-2007 and the trial production is taken, say, first time in 2008, you are liable to pay cess under the BOCW Act from 2002-2007. I repeat, you are liable to pay cess for the period prior to you start your production or manufacturing process first time.
Point No. 2 : If a new construction is going on in existing Factory and all employees are covered under EPF and ESIC, do we have to pay cess in such Conditions?
My Reply : You are not liable to pay cess.
Point No. 3 : Do you need to pay the cess under BOCW Act on new building Electrical Wiring, Air Conditioners, Lights, and Furniture etc...?
My Reply : Yes.
Point No. 4 : Do you need to pay cess under BOCW Act on Machinery Installed for production in the same premises?
My Reply : Yes.
I have given you the judgment of MP H.C. on cess on total cost. I suppose you are from Bhopal, MP. Still I feel, you can take a call whether to pay cess or not, on Electrical Wiring, Air Conditioners, Lights, Furniture, Machinery installed etc.
I came across an opinion given by one of the former Chief Justice of India on this subject. This opinion is confidential and privileged to the members of one of the Manufacturing Association.
Secondly, If the authority is demanding cess from you on new construction within the existing factory, you are advised to write a letter the authority. I faced similar issue in Mandi Deep, MP in 2004-5. For your ready reference, I am giving you a draft letter as under:
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To,
..
...
Dear Sir,
Our construction work in the existing factory premises
viz.
.. at
..
This has reference to your demand for Cess under BOCW Act for above construction work.
We wish to draw your kind attention as under:
1. Our construction work as stated above is within the premises and precints of existing factory under the Factory Act 1948. And hence the said construction work does not include in the definition of building or other construction work as defined in section 2 (1) d of the BOCW Act 1996.
2. Since our construction work does not include in the definition of building or other construction work as defined in section 2 (1) d of the BOCW Act 1996, the provisions of BOCW Act 1996 are not applicable to this construction work and we are not liable to pay cess under this Act.
We further wish to draw your kind attention as under:
1. The said construction work is included in our Factory registration as well in Factory Licence.
2. The manpower engaged for the said construction work is also included in the Factory Licence and Licence fee is also paid by us accordingly.
3. And hence the said construction work is a part and parcel of existing factory.
Under the circumstances we request you to kindly cancel the demand of cess from us.
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All the best to you.