9911796707
TMI Blog1987 (2) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... e separately in the proportion which the number of days for which the concern worked double or triple shift as the case may be. Therefore, the claim of the assessee is fully justified, which we allow. 2. On the second issue, the assessee referred to the order of the ITO and submitted that the expenses that were included under misc. expenses were: (a) Incurred on Inspectors of buyers for the lodging and boarding. (b) Present of articles to the customers of a value of more than Rs. 50. (c) Entertainment expenses incurred at the Labour Court. 3. In respect of the first of the items, the plea of the assessee was that it is in the interest of the assessee that the goods are approved by the buyers prior to its leaving the premises so that it would avoid complaints and the assessee having to replenish the goods which are rejected by the buyer subsequently. Since the buyers have to stay overnight because inspection could not be completed they have to be necessarily provided with the boarding as well as lodging facilities. These are, therefore, related to the business as such. It was further argued that the expenses should be such that it could be called to be entertainment and un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the first issue the plea of the Department was that the Excise authorities issued a show cause notice dt. 19th Sept., 1982 wherein they have asked the assessee to explain as to why the amount of Rs. 9,06,352 and Rs. 42,257 allowed to them as credit should not be withdrawn or recovered from them. Referring to this notice, the ld. departmental representative submitted that certain credit on account of Excise Duty was allowed to the assessee in an earlier year by means of an order dt. 8th Aug., 1980, which credit as per the present show cause notice was provisional. As per the show cause notice, the earlier advice issued was apparently wrong as the assessee was not entitled to any proforma credit in respect of Zinc. In these circumstances, the assessee was called upon to explain as to why the amount should not be withdrawn. In this notice, they have further observed that the assessee should put forth all the evidences in support of their claim. According to the IAC, on this basis of this particular notice, there was no liability arising on the assessee as still remained to be quantified or even determined as it was only a proposal or an enquiry with a view to examine whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in CIT vs. Nagri Mills Co. Ltd. (1958) 33 ITR 681 (Bom) to emphasis that since the rate of taxation being uniform it does not really matter as to which year it is allowed, i.e., whether it should be related to the year in which the credit is allowed or in the year of claim or in the year of actual quantification. On the issue of expenses claimed on scientific research it was fairly conceded that the decision of the Tribunal is against the assessee. 10. We have given very careful consideration to the arguments put forth by the parties. The reading of the show cause notice dt. 19th March, 1982 indicates that the issuing authority with a view to examine whether their earlier action of granting of proforma credit in respect of zinc was proper or otherwise had called upon the assessee to explain its case. In this notice has been mentioned that the earlier credit that was provided was provisional and it has further been said that since no set off prior to 1st Jan., 1980 is permissible, the assessee is not entitled to proforma credit allowed earlier. The notice further adds that the assessee is called upon to show cause as to why the credit already allowed should not be recover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit and loss account. In fact, this particular angle of the matter was not at all examined by the authorities below. Even assuming that is was credited to the profit and loss account in the asst. yr. 1982-83 on the basis of the earlier credit allowed, the assessee could perhaps claim the deduction if it is to be treated as a deduction. Only when it is determined or accepted by the assessee finally that it is in fact, a liability on the gods manufactured. In other words, deposit of duty or refund of duty does not result in either expenditure or income, in view of the fact that the nature of excise duty being such that it is chargeable as expense in the proportion of the goods manufactured and it requires the actual production of the goods before they are sold. Excise duty is an exaction, which must be paid by the manufacturer and it stops at the point of payment and there is no provision for refund of excise duty once it is paid under law, except where it is found that the collection has been excessive, then is permitted under law. On this basis, we are of the view that the claim of the assessee is not at all tenable in law. In this respect the argument of the ld. departmental repre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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