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TMI Blog2014 (10) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... tendent of Central Excise that had undertaken the entire exercise - once the respondent is relieved of the liability to pay the amount covered by bonds, Section 41 (1) of the Act gets attracted and the liability can be said to have ceased – assessee had to pay the tax on the amount, regarding which he cleared exemption in the returns for the earlier AYs - The only difference would be that since the actual determination emerged only in May, 1993, it shall be under obligation to reflect the same in the returns for the year 1994-95 - So the amount was ordered to be refunded – Decided against revenue. - R.C.No.111 of 2001, I.T.T.A No.7 of 2002 - - - Dated:- 22-7-2014 - L. Narasimha Reddy And Challa Kodanda Ram,JJ. For the Petitioner : Sri J. V. Prasad For the Respondent : Sri Y. Ratnakar JUDGMENT (Per Honble Sri Justice L. Narasimha Reddy) The appeal and reference are interrelated and are in relation to the same assessee and for the same period, but covering two different assessment years. Hence, they are disposed of through a common judgment. Both the proceedings are at the instance of the Revenue. The respondent is a Company, undertaking the activity of ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity, however, took view that there was no cessation on the basis of order passed by the Superintendent of Excise and the corresponding amount being ₹ 1,66,62,866/- is liable to be assessed for the assessment year 1992-93. A separate order was passed in respect of the refund of about ₹ 18,00,000/-. Since that refund came only in May, 1993, benefit thereof was extended for the assessment year 1994-95. The respondent carried the matter in appeal before the Commissioner of Income Tax (Appeals). The appellate authority upheld the view taken by the assessing authority. Further appeal in I.T.A.No.63/Hyd/1996 was filed in relation to the assessment year 1992-93 before the Hyderabad Bench B of the Income Tax Appellate Tribunal regarding the benefit under Section 41(1) of the Income Tax Act, 1961 (for short, the Act). Through its order, dated 25.04.1996, the Tribunal took the view that there was no cessation or remission referable to Section 41 of the Act, as a result of the order, dated 19.05.1993, passed by the Superintendent of Excise; and that the corresponding amount is not liable to be brought under income tax. The Revenue filed R.A.No.462/Hyd/1996 under Section 256 (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be sustained in law. He contends that the respondent claimed deduction in the preceding years of assessment at a time when the dispute was pending before the authorities under the Central Excise Act, and once the competent authority held that the liability, to that extent, no longer exists, the amount ought to have been brought under the purview of the tax. He further submits that the conclusions recorded in paragraph No.22 of the order of the Tribunal in I.T.A.No.62/Hyd/1996 do not reflect the actual area of controversy nor does it according to law. Sri Y. Ratnakar, learned counsel for the respondent, submits that though the Assistant Collector passed an order on 19.02.1992, the actual determination of the liability had taken place only on 19.05.1993, when the Superintendent of Excise passed the consequential order. He contends that the cessation of liability could not be reflected in the returns for the assessment year 1993-94 on account of the fact that the clear picture did not emerge and the respondent was entitled in law, to mention the same in the assessment year 1994-95. He further submits that the refund of the amount of about ₹ 18,00,000/- has also taken place in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly stipulated the broad guidelines, according to which, the excise duty must be determined. The working out part of it was entrusted to the Superintendent of Central Excise. He, in turn, completed that exercise on 19.05.1993. The effect of the order, dated 19.05.1993, was two fold. The first was that the Conversion Unit, and thereby the respondent were held to be not under obligation to pay any amount covered under bonds, and thereby the bonds stood discharged. The second was that a sum of about ₹ 18,00,000/- was to be refunded from out of the excise duty, already paid by the commission unit. The benefit of this has also accrued to the respondent, since it has claimed deduction on account of payment of excise duty. Notwithstanding the uncertain, nature of the claims that were made before the assessing authority and appellate authority, the actual area of controversy was about the year of assessment, in which both the components referred to above must be adjusted or reflected. The assessing authority took the view that the date of order passed by the Assistant Commissioner of Central Excise constitutes the basis and accordingly the assessment of those components must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the assessment year 1994-95 and the earlier year. The emphasis of the Income Tax Officer as well as the Commissioner of Income Tax (Appeals) was on the date of the order, passed by the Assistant Collector i.e., 27.04.1992. It may be true that the adjudication, as such, under the Central Excise Act vis--vis the Conversion Unit has taken place only in the hands of the Assistant Commissioner. Had it been a case where the Assistant Commissioner determined the quantum of excise duty, the view taken by the Income Tax Officer could have been accepted. It has also been mentioned that the Assistant Commissioner, Central Excise, did nothing more than indicating the parameters for determining or reckoning the excise duty. To be precise, he directed that the nearest comparable unit must be taken as the basis for determining the excise duty for the products manufactured by the Conversion Unit. Barring that, he did not undertake any calculation or reckoning. It was only the Superintendent of Central Excise that had undertaken the entire exercise. He identified M/s. Super Food Products, as the comparable unit and passed order on 19.02.1995, indicating the exact amount of excise duty payable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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