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TMI Blog2019 (4) TMI 1490X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain incentives under the said scheme. The clear objective behind the scheme was, thus, to reduce the cost of its procurements and to neutralize certain inherent disadvantages attached to such products. Clearly, thus, the case was covered by the decision of the Supreme Court in the case of Meghalaya Steels Ltd [ 2016 (3) TMI 375 - SUPREME COURT] extensive reference to which has been made earlier. This is not a case akin to export incentives such as DEPB which the Supreme Court in case of Liberty India [ 2009 (8) TMI 63 - SUPREME COURT] held was a benefit far removed from the assessee s business of export. Question is answered in favour of the appellant - assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... te fluctuation but disallowed the other two. In this appeal, the assessee has confined its grievance in relation to the benefits received under VKGUY Scheme and not pressed the deduction in respect of DEPB benefits which were denied by the Tribunal on the basis of the decision of the Supreme Court in the case of Liberty India Vs. CIT (2009) 317 ITR 218 (SC). 4. In such background, following substantial question of law is framed for the purpose of these appeals. "Whether the Tribunal was right in law in rejecting the assessee's claim of deduction under Section 80IB(11A) of the Act in relation to the benefits received by the assessee under VKGUY scheme upon the export of its agro products?" 5. It is undoubtedly true that the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that in the said case, the Court was concerned with the export incentive which is far removed from the activity of export. The profit, therefore, cannot be said to have been derived from such activity. In the opinion the Court in the case on hand was one where the transport and interest subsidy had a direct nexus with the manufacturing activity in as much as these subsidies go to reduce the cost of production. In this background, it was observed as under:- "20. Liberty India being the fourth judgment in this line also does not help Revenue. What this Court was concerned with was an export incentive, which is very far removed from reimbursement of an element of cost. A Duty Entitlement Pass Book Drawback Scheme is not related to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote parts of the country with other parts, so as to bring about economic development of remote backward regions. This was sought to be achieved by the Scheme, by making it feasible and attractive to industrial entrepreneurs to start and run industries in remote parts, by giving them a level playing field so that they could compete with their counterparts in central (non-remote) areas. The huge transportation cost for getting the raw materials to the industrial unit and finished goods to the existing market outside the state, was making it unviable for industries in remote parts of the country to compete with industries in central areas. Therefore, industrial units in remote areas were extended the benefit of subsidized transportation. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les and other products, as listed in Table 2 of Appendix 37A shall be entitled to an additional duty credit scrip equivalent to 2% of FOB value of exports; over and above the 5% or 3% VKGUY reduced rate entitlement available as per Para 3.13.3 below Applicability of Reduced Rate 3.13.3 Duty Credit Scrip benefits under VKGUY scheme shall be granted only at a reduced rate of 3% of FOB value of exports in such cases where exporter has also availed benefits of: (i) Drawback at rates higher than 1%; and/or (ii) Specific DEPB rate (i.e. other than Miscellaneous Category - Sr. Nos. 22C & 22D of Product Group 90); and/or (iii) Advance Authorization or Duty Free Import Authorization Import of inputs (other than catalysts, consumables and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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