9911796707
TMI Blog1992 (6) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... the form of appeal to the Appellate Tribunal as 23rd Feb., 1987 which is the date of the order. In these circumstances, the assessee prayed for condonation of the delay in filing the appeal. We are satisfied with the reasons stated in the affidavit and condoned the delay and admit the appeal to file. 3. The assessee company prepares rubber compounds for utilisation in rubber industries. The components used by the assessee include carbon black, oil and chemicals. The end product is in sheet form. The assessee claimed investment allowance under s. 80-I. The claim was rejected by the ITO on the ground that the Item No. 27of Eleventh Schedule excludes these items being derivatives rubber in nature. Besides the ITO opined that the assessee-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulation. Therefore, it is clear that the emphasis in 80J is not on the activity itself but on the ultimate production or manufacture of articles. It was held by the Gujarat High Court in Cellulose Products of India vs. CIT (1977) 110 ITR 151 (Guj) that the articles for this purpose should only mean the end product and not intermediate product. Looked at from this point of view, the product manufactured by the appellant viz., rubber compounds would not be an end product in itself which can be classified as an article. Accordingly, in my view whereas the appellant would be entitled for its claim for investment allowance but it would not be entitled for the deduction under s. 80-I". It is against this order, the assessee is in appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected the claim of the assessee. 7. After hearing the learned Representative of the assessee we are of the opinion that the conclusion arrived at by the ITO and the confirmation of the same by the CIT(A) that the assessee's end product is only an intermediate article is not at all justified. As far as the assessee is concerned what is obtained finally is an end product. It goes straight to the parties who purchase it from the assessee for the production of tyres, etc. For the simple reason that the product of the assessee is utilised by some other companies like Apollo Tyres Ltd., etc. for producing their final products, i.e. tyres, tubes, etc., it does not make the assessee's product an intermediate product. For example: for a paddy c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that the case of the assessee does not fall within the ambit of item No. 27 of Eleventh Schedule. The product the assessee in supplying in the market is not crown corks, or other fittings of cork, or other fittings of rubber, or other fittings of polyethylen or any other fitting material. The rubber compound produced by the assessee is produced by a long drawn process using carbon black, rubber processing oil and other rubber chemicals and subjecting the natural rubber to various processes at different stages as set out in para. 5 above. The further stand of the Department that the assessee does not manufacture or produce an article or thing also cannot be accepted as a valid plea. The assessee, as we have clearly held while dealing with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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