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TMI Blog1991 (11) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... 30,000 The case of the assessee before the Income-tax Officer was that it was not liable to excise duty. It moved the High Court to pass an interim order restraining the central excise authorities from realising the duty. By a notification dated December 13, 1980, the Government exempted aluminium foils from payment of duty if they are made for export, This exemption became effective from January 5, 1981, i.e., subsequent to the previous year under consideration. The Income-tax Officer disallowed the claim of the assessee on the ground that the excise duty related to period prior to the previous year under consideration and the same was not allowable under the mercantile system of accounting. On appeal, the Commissioner of Income-tax ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 2,57,304 was levied as duty was made during the previous year under consideration. It is the clearance of the goods which attracts statutory excise duty. Hence, the Tribunal held that the sum of Rs. 2,57,304 was rightly allowed by the Commissioner of Income-tax (Appeals) as a deduction. However, regarding the other two items, the Tribunal found no nexus between the expenses and the previous year under consideration. The Tribunal observed that the clearance of the manufactured products occurred long before the previous year under consideration. Hence, relying on the decision in the case of Kedarnath Jute Mfg. Co. Ltd. [1971] 82 ITR 363 (SC), the Tribunal upheld both the allowance of Rs. 2,57,304 and the disallowance of Rs. 82,14,425 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hearing before us, Mr. Moitra, learned counsel for the Revenue, contended that no part of the liability claimed accrued during the relevant previous year as, according to him, the duties of excise are imposed on production or manufacture of goods and the taxable event occurs on the production or manufacture of goods. It is his contention that the liability to pay excise duty does not depend on the clearance of goods. He has submitted that, in this case, admittedly, the goods were not manufactured during the relevant previous year and the question of levying the excise duty during the assessment year did not arise. We are, however, unable to accept the contention of learned counsel on the facts and in the circumstances of the case. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral excise authorities from levying duty on aluminium foils. Thereafter, the Central Government issued a notification on December 13, 1980, exempting aluminium foils from the payment of excise duty for export under bond. This notification was made effective from January 5, 1981. Accordingly, the goods manufactured and cleared prior to the said notification were liable to duty. In this case, the show cause-cum-demand notice was issued during the relevant previous year. The goods were also cleared during the relevant previous year and, accordingly, the assessee is entitled to the benefit of deduction of the liability covered by the said show cause-cum-demand notice in respect of the goods cleared during the relevant previous year. It is tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the assessee under the Employees' Provident Funds Act, 1952. The Income-tax Officer and the Appellate, Assistant Commissioner disallowed the claim on the ground that the contribution related to earlier years. On further appeal, the Tribunal found that though it was a statutory liability under the Employees' Provident Funds Act to make contributions, it was never enforced under the Act in the earlier years, and it was only in the year under appeal that the Regional Provident Fund Commissioner called upon the assessee to make statutory contributions for the entire period from November, 1957, and that, since the demand for the statutory contribution was made by the authorities for the first time during the year under appeal, the entire a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of contribution to the ESI Corporation for the period from January 28, 1968, to June 30, 1973. The Income-tax Officer rejected the claim for deduction on the ground that the same was not a liability for the year under consideration. The Appellate Assistant Commissioner affirmed the order of the Income-tax Officer on the ground that as the assessee followed the mercantile system of accounting, the liability accruing under a statute was allowable as a deduction in the year when the liability accrued and since the liability accrued under the statute itself as amended and the assessee did not make any provision for such liability in the earlier years, the same was not an allowable deduction for the assessment year 1975-76. The Tribunal affirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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