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TMI Blog2014 (9) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... - Reference was then made to the statutory mandate of Section 145A of the Act, that the valuation of the closing stock must include any tax, duty, cess or fee actually paid or incurred by the assessee to bring the goods to the place of its location and condition on the date of valuation - on manufactured goods, excise duty is payable after adjustment of CENVAT or MODVAT credit on the date of removal and not on the date of manufacture – relying upon CBDT circular No. 772 dated 23.12.1998 and CIT Vs. Lakshmi Sugar Mills Co. Ltd. [2013 (7) TMI 385 - DELHI HIGH COURT] - MODVAT credit cannot be reduced from the value of opening or closing stock – thus, the matter is to be remitted back to the Tribunal for fresh adjudication – Decided in favour o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessment Year 2005-06 in favour of the respondent assessee. On further appeal by the Revenue, this issue was decided in favour of the respondent-assessee and against the Revenue by again relying upon order passed by the Tribunal for the Assessment Year 2005-06. 5. Learned counsel for the Revenue has drawn our attention to the order dated 03.12.2012 passed in ITA No. 1288/2011, Commissioner of Income Tax Vs. Lakshmi Sugar Mills Co. Ltd. relating to the Assessment Year 2005-06 and it is submitted that the decision of the Tribunal has been reversed. This is correct; the decision of the Tribunal for the Assessment Year 2005-06 has been reversed by the High Court and the issue decided against the respondent-assessee. The reasoning give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax, duty, cess or fee (by whatever name called) actually paid . This provision was introduced in 1999, and overrides other provisions. Its object is to include, for the purpose of valuation of goods, the actual amount of tax, duty, cess or fee, paid by the assessee. Unlike in the case of Section 43-B, which mandates the inclusion, in the computation of income, amounts paid, towards certain liabilities, including tax, but not actually arising or accruing at the time of payment, this provision (Section 145-A) directs inclusion of the amounts of tax, duty etc, actually paid for the purpose of valuation alone. 14. The decision of the Supreme Court in Orient Paper Mills Ltd. Vs. Union of India AIR 1967 SC 1564 is now an authority on the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the AO s opinion could not have been faulted in the facts of the case . 6. The aforesaid paragraphs state that as per Section 145A, which is a non-obstante provision and prescribes manner of valuation of goods, any tax, duty, cess or fee actually paid or incurred has to be added to the value of the stock. Thus, Section 145A of the Act directs inclusion of tax, duty etc., actually paid or incurred for the purpose of valuation. Reference was thereafter made to Orient Paper Mills Ltd. Vs. Union of India, AIR 1967 SC 1564 and it was observed that levy of duty arises only at the time when the excisable goods are removed from the factory premises or any other specified place of removal. The duty is leviable and is actually imposed on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all such payments notwithstanding any right arising as a consequence to such payment. 9. The expression 'incurred by the Assessee' in Section 145A(b) is followed by the words 'to bring the goods to the place of its location and condition as on the date of valuation'. Thus, the expression 'incurred by the Assessee' relates to the liability determined as tax, duty, cess or fee payable in bringing the goods to the place of its location and condition of the goods. Explanation to Section 145A(b) makes it further clear that the income chargeable under the head profits and gains of business shall be adjusted by the amount paid as tax, duty, cess or fee. Therefore, the expression 'incurred' in Section 145A(b) must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not cleared from the factory. Therefore, in the facts of the present case, the ITAT was justified in holding that in respect of unsold sugar lying in stock, central excise liability was not incurred and consequently the addition of excise duty made by the assessing officer to the value of the excisable goods was liable to be deleted. 8. This Court, on 21.10.2013 had passed a detailed order, noticing the fact that the closing stock can consist of opening stock, purchases and manufactured stock. Reference was then made to the statutory mandate of Section 145A of the Act, that the valuation of the closing stock must include any tax, duty, cess or fee actually paid or incurred by the assessee to bring the goods to the place of its locati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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