9911796707
TMI Blog2019 (9) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... t investment on dyes and moulds worth Rs. 54,29,827/- and Rs. 77,26,490/-, made during A.Y. 1997-98 and 1998-99 respectively. That claim had been denied on the reasoning that the assessee had not made use of such dyes directly, but had given them out to job workers to manufacture component parts used in the manufacture of Colour Television Sets manufactured by the assessee, at its new unit. Also, the Commissioner denied the benefit of exemption on purchase of machinery valued at Rs. 34,84,137/- that had been purchased by the assessee and made use of at it's own new unit but whose value had been written off subsequently. In that regard, it is the assessee's case that the value had been written off in the months of November and December 2002 well after expiry of five years from the date of starting production, being 17.04.1997, whereas, according to the revenue, that date was not clear. The order of the Commissioner has been upheld by the Tribunal on the reasoning that the assessee did not lead evidence with respect to moulds and dyes and on the further reasoning that it was not established whether the value of the machinery of the other machines had been written off after fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imself. 6. With respect to the dyes, reliance has been placed on a circular letter issued by the Commissioner, Trade Tax dated 23.12.1985. Under clause (7) thereof, it was clarified that a 'new unit' may continue to avail exemption, though, some part of the manufacturing activity may be got done against job work arrangement. On the issue of writing off of value of certain machineries, it had been clarified that the assessee, in its reply, had specifically informed the Commissioner that the machineries valued at Rs. 34,84,137/- had been written off during the period 30.11.2002 to 31.12.2002. Details of the same had been brought on record by means of paragraph 2 (a)(iv) of the written reply dated 20.06.2007 submitted by the assessee in response to the notices issued under Section 4-A (3) of the Act, dated 05.09.2006 and 22.05.2007. Those dates being beyond the period of five years from the date of production, it has been submitted, the exemption had been rightly granted. 7. Also, a direct challenge has been raised to the very power and jurisdiction of the Commissioner. It has thus been submitted that the power under Section 4-A(3) of the Act was restricted to rectifying cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brand names Thumps-up, Limca, Rim Zim, Maaza etc. from before. Subsequently, it started production of other soft drinks under the brand names Coca Cola and Fanta. With respect to the manufacturing of Coca Cola and Fanta, it claimed to have made investment to establish a 'new unit' and claimed exemption under Section 4-A (3) of the Act, under the then existing notification. The same was also allowed by the Divisional Level Committee in regular course as had also been done in this case. Instead of seeking the remedy of appeal, the Commissioner sought to reduce the exemption on the reasoning that the goods Coca Cola and Fanta were similar to those being manufactured by that assessee from before. Therefore, the assessee was not entitled to claim exemption. While the Commissioner had passed an order against the assessee which was affirmed by the Tribunal, the learned Single Judge of this Court held as below: "In my view such an interpretation of the law is not feasible. As pointed out above, the Divisional Level Committee consists of senior officers and is prescribed over by an officer of the same rank as the Commissioner and it is inappropriate to assume that under Section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch cases, it is seen that in the instant case, it is wholly debatable whether the assessee was entitled to exemption on the investment made on dyes and moulds, merely because such dyes and moulds had been given out to job workers who used the same to manufacture the components that came to be used in the manufacture of the end product by the assessee, namely colour television sets. It appears to be debatable as the revenue could not point out any specific provision, either in the Act or under the exemption notification, as may dis-entitle a new unit from exemption on the value of such dyes and moulds used by job workers to manufacture component parts for the new unit. Such issue is further rendered debatable in view of the clear language of the circular letter of the Commissioner of the Trade Tax dated 23.12.1985. Though, that circular was issued during the currency of an earlier notification issued under Section 4-A of the Act, however, in view of the same provision of law namely Section 4-A of the Act continuing to exist and similar nature and purpose of the notified schemes of exemption, it appears to be prima-facie permissible in law for a 'new unit' to be entitled to a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
