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TMI Blog2016 (5) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... the modalities provided by the Department of Revenue for giving effect to the exemption notifications. There is also nothing to suggest that the assessee has recovered or passed on the excise duty element to its customers. The issue of payment of central excise duty would not arise in the absence of any industrial activity. There is, therefore, an inextricable link between the manufacturing activity, the payment of central excise duty and its refund. - Decided in favour of the assessee. Addition on account of rebate and discount relates to purchase of material which was shown on the credit side of the Profit & Loss Account - eligible for deduction under section 80IB - Held that:- CIT(Appeals) correctly found that impugned rebate and discoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer was not satisfied with the explanation of the assessee and disallowed deduction under section 80IB of the Act on Excise Duty received. During the course of appellate proceedings, the assessee submitted that deduction under section 80IB is allowable on Excise Duty received in view of the decision of ITAT Chandigarh Bench in the case of M/s Shivalik Agro Chemicals vide order dated 20.12.2011 in ITA 968/CHD/2010. 5(i) The ld. CIT(Appeals) noted that in preceding assessment year 2009-10 vide order dated 05.11.2012. Similar addition deleted by him by following decision of ITAT Chandigarh Bench in the case of M/s Shivalik Agro Chemicals (supra), accordingly, deleted the addition. 6. The ld. counsel for the assessee, at the outset submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no dispute that the assessee was entitled to the central excise duty refund. 18. The Central Board of Excise and Customs in its Circular dt. 19th Dec., 2002 clarified that the refund is not on account of excess payment of excise duty but is basically designed to give effect to the exemption and to operationalise the exemption given by the notifications. In that sense, the central excise duty refund does not appear to bear the character of income since what is refunded to the assessee is the amount paid under the modalities provided by the Department of Revenue for giving effect to the exemption notifications. There is also nothing to suggest that the assessee has recovered or passed on the excise duty element to its customers. Even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cided was in respect of the allowability of transport subsidy, interest subsidy and power subsidy for the purposes of deduction under section 80IB of the Act and not that of excise duty refund. Though no help of the said judgment can be taken in the present appeal, this also goes to show that the decision of the Gauhati High Court with regard to the excise duty refund has become final. 11. The appeal of the Department is dismissed." 7. On consideration of the rival submissions, we are of the view the issue is covered in favour of the assessee by order of ITAT Chandigarh Bench in the case of the same assessee for preceding assessment year 2009-10 in which the ld. CIT(Appeals) deleted similar addition vide order dated 05.11.2012 and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in assessment year 2005-06. 9. The ld. CIT(Appeals) found that impugned rebate and discount relates to purchase of material. The assessee has not deducted this amount from the purchases but has shown it separately on credit side of the Profit & Loss Account. Similarly, disallowance made under section 80IB of the Act on rebate and discount was allowed by the ld. CIT(Appeals) in the case of sister concern of the assessee M/s Industrial Equipment Co. in assessment year 2006-07 vide order dated 10.09.2007 and therefore, following the order of his predecessor, ld. CIT(Appeals) allowed this ground of appeal of the assessee. 10. The ld. counsel for the assessee, at the outset submitted that ITAT Chandigarh Bench in the case of M/s Industrial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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