2008 (2) TMI 323 - HC - Income Tax

Whether on the facts and circumstances of the case Hon ble ITAT was correct on holding that assessee s claim for the Excise Duty paid in advance, which has not actually become payable, is correct similar question of law raised by revenue against the decision in the case of Raj & Sen Deeps Ltd., Ludhiana vs. A. C.I.T. 2008 -TMI - 31178 - PUNJAB AND HARYANA HIGH COURT has been answered against the revenue by the HC hence revenue appeal is dismissed in instant case

Summary

Issues:
1. Disallowance of Excise Duty claim paid in advance.
2. Justification of paying Excise Duty in advance.
3. Interpretation of previous decisions on similar issues.
4. Concession by the counsel regarding the previous reference.

Issue 1: Disallowance of Excise Duty claim paid in advance
The appeal filed by the revenue challenged the order disallowing the claim of the assessee for an amount paid as Excise Duty in advance. The Assessing Officer disallowed the claim, stating that since the duty had not become payable, there was no justification for the advance payment. The Commissioner of Income Tax (Appeals) later deleted the addition, leading to the revenue's appeal before the ITAT. The ITAT, considering its earlier decision in a similar case, upheld the deletion of the addition.

Issue 2: Justification of paying Excise Duty in advance
The core issue revolved around whether the assessee's claim for Excise Duty paid in advance, which had not yet become payable, was valid. The Assessing Officer's stance was that there was no justification for paying the duty in advance when it was not due. However, the Commissioner of Income Tax (Appeals) and the ITAT both ruled in favor of the assessee, ultimately leading to the dismissal of the revenue's appeal by the High Court.

Issue 3: Interpretation of previous decisions on similar issues
The counsel for the revenue acknowledged a previous reference where a similar question of law was raised regarding the addition made on account of advance excise duty paid. The reference had been answered against the revenue and in favor of the assessee. This acknowledgment further supported the decision of the High Court to dismiss the present appeal, as no substantial question of law was deemed to arise for consideration based on the precedents and interpretations of previous decisions.

Issue 4: Concession by the counsel regarding the previous reference
The counsel representing the revenue conceded that a previous reference had been decided against the revenue and in favor of the assessee on a similar issue. This concession strengthened the position that no substantial question of law was present in the current appeal, as the matter had already been settled through previous interpretations and decisions.

In conclusion, the High Court dismissed the appeal, upholding the decisions of the Commissioner of Income Tax (Appeals) and the ITAT regarding the validity of the Excise Duty claim paid in advance, based on the interpretations of previous decisions and the absence of any substantial question of law warranting further consideration.