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TMI Blog2011 (4) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... capital investment” which as per provision enacted also includes all such investment made for equipment, apparatus, components and machinery which are necessary for running of the factory or workshop - Held that: so far bottles are concerned, they are essential part of components and equipments necessary for the running of the factory and therefore such value of the investment would form part of the fixed capital investment and would be entitled to exemption as provided for - Appeal is disposed of - Civil Appeal No. 3186 of 2011 - - - Dated:- 11-4-2011 - Dr. Mukundakam Sharma and Anil R. Dave, JJ. REPRESENTED BY : S/Shri Sunil Gupta, Sr. Advocate, Shail Kumar Dwivedi, AAG, G. Venkataswara Rao, Tanmay Agarwal, A. Shukla, Manoj Kumar Dwivedi, Gunnam Venkateswara Rao, Advocates, for the Appellant. S/Shri Dhruv Agarwal, Sr. Advocate and Parveen Kumar, Advocate, for the Respondent. [Judgment per : Mukundakam Sharma, J.]. Leave granted. 2. This appeal is directed against the Judgment and Order dated 19-1-2010 passed by the Allahabad High Court whereby the High Court allowed the revision petition preferred by the respondent holding that values of bottles and crat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - invested by the assessee towards purchases of bottles and crates should also be included in the fixed capital investment. 6. The Divisional Level Committee vide its order dated 10-4-2001 allowed the review application and ordered that the aforesaid amount of Rs. 5,73,62,277/- be included while computing the fixed capital investment of the assessee. By the aforesaid order dated 10-4-2001 the eligibility certificate was also granted to the assessee for a period of 15 years. 7. Being aggrieved by the aforesaid order dated 10-4-2001 the appellant filed an appeal before the U.P. Tribunal, Trade, Tax, Lucknow. The Tribunal by its order dated 14-5-2002 allowed the said appeal filed by the appellant holding that the bottles and crates are neither directly nor indirectly used in the manufacture of beverages and therefore the same cannot be treated as Apparatus as used in the said entry in explanation (4) to Section 4-A of the Act. 8. Being aggrieved by the said order passed by the U.P. Tribunal, Trade, Tax, Lucknow, the respondent assessee filed a revision petition before the Allahabad High Court which was registered as Trade Tax Revision No. 337 of 2002. The High Court by its ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive power plant, machinery, equipment, apparatus, components, moulds, dyes, jigs and fixtures. It is mentioned in sub-clause (b) inserted in the proviso to sub-section (4) of Section 4-A of the Act that for the purposes of determining value of plant including captive power plant, machinery, equipment, apparatus, components, moulds, dyes, jigs and fixtures only the following shall be taken into account :- (i) investment, whether by means of purchases, hire or lease in such plant, equipment, apparatus, components and machinery, as is necessary for the establishment or running of the factory or workshop. 13. Relying on the aforesaid provisions the counsel appearing for the appellant submitted that bottles and crates cannot be held to be Fixed Capital Investment either for establishment or running of the factory or workshop of the respondent and therefore the value of the same cannot be included within the expression fixed capital investment and, therefore, the High Court was not justified in directing for inclusion of the value of the aforesaid bottles and crates to be read within the expression of fixed capital investment . Counsel appearing for the appellant further submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of CST v. Industrial Coal Enterprises, reported at (1999) 2 SCC 607, observed that as under : - 6. Admittedly the provisions for exemption from sales tax have been introduced in the Act for the purpose of increasing the production of goods and for promoting the development of industries in the State. In fact, when the scheme called Grant of Sales Tax Exemption Scheme 1982 to industrial units under Section 4-A of the Sales Tax Act was originally framed, it was expressly stated that the Government granted the facility of exemption in order to encourage the capital investment and establishment of industrial units in the State. The Scheme contained various rules for grant of such exemption . xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 11. In CIT v. Straw Board Mfg. Co. Ltd. this Court held that in taxing statutes, provision for concessional rate of tax should be liberally construed. So also in Bajaj Tempo Ltd. v. CIT it was held that provision granting incentive for promoting economic growth and development in taxing statutes should be liberally construed and restriction placed on it by way of exception should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, after having received representations from the industry seeking clarification whether bottles and crates are to be taken into account for determining the SSI status of the units engaged in manufacture of soft drinks/concentrates, clarifying that investment in bottles and crates in such units is in the nature of storage of finished products and, therefore, such investment has to be excluded while computing the value of plant and machinery. 9. As pointed out in the affidavit-in-rejoinder, the Company had applied for an Eligibility Certificate claiming the status of a small-scale industry. It is, in fact, registered as a small-scale industrial unit. While declaring its investment at the time of seeking registration as a small-scale industrial unit, it did not include investment in bottles and crates under the head Plant and Machinery . The investment in bottles and crates was. shown under a separate head. It is further pointed out in the said affidavit that if the investment of the Company in bottles and crates is included under the head Plant then its total fixed capital investment will reach the level of 137.36 lakhs and it can no longer be regarded as a small-scale industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the word investment as appearing from the words fixed capital investment . To that extent, facts of the present case are distinguishable from the facts of State of Bihar and Others (supra) on which reliance was placed by the counsel appearing for the appellant. 23. Considering the facts and circumstances, we hold that so far bottles are concerned, they are essential part of components and equipments necessary for the running of the factory and therefore such value of the investment would form part of the fixed capital investment and would be entitled to exemption as provided for. But so far crates are concerned they are used by the respondent only for the purpose of marketing. Use of crates is necessary for taking out the bottled beverages out of the factory and while doing the marketing of the sealed bottled beverages. The aforesaid view taken by us also receives support from the contents of the eligibility certificate given by the appellant and therefore crates have no user so far as running of the factory of the respondent. Therefore, the value of crates in our considered opinion cannot be deemed to be investment for the purpose of including it within the meaning of e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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