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TMI Blog1981 (4) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... at the benefit of cl. (5)(a)(ii) would not be available in the case of the items specified in cl. (c). The Tribunal took the view that the rebate under cl. (5)(a)(ii) was in respect of the articles manufactured and that the ban in cl. (5)(c) was not in respect of articles relating to the industries specified therein. The Tribunal took the view that such a construction of cl. (5)(c) could not be ruled out and if there was some difficulty in the interpretation and two possible views could be taken, it was settled law that the view favourable to the taxpayer should be taken when construing a fiscal enactment. The Tribunal thus directed the ITO to give the appropriate relief under s. 2(5)(a)(ii) of the Finance Act. Arising out of this order of the Tribunal, the following question has been referred at the instance of the revenue under s. 256(1) of the I.T. Act, 1961 : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that on a correct construction of section 2(5)(a)(ii) and section 2(5)(c) of the Finance Act, 1964, the assessee was entitled to rebate of tax on exports of de-oiled cake ?" In order to appreciate the contentions raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d evidence is produced before the Income-tax Officer of such articles having been so exported, the assessee shall be entitled to a deduction from the amount of income-tax and super-tax with which he is chargeable for the assessment year of an amount equal to the income-tax and super-tax calculated respectively at the average rate of income-tax and the average rate of super-tax on a sum equal to two per cent. of the sale proceeds receivable by him in respect of such articles from the exporter ...... (c) Nothing contained in sub-clause (ii) and sub-clause (iii) of clause (a) shall apply, (i) in relation to ....... (8) vegetable oils and vanaspathi.... respectively specified in items 2, 18,20..." A careful reading of sub-cls. (ii) and (iii) above will show that they are special provisions permitting the assessee to earn an additional export rebate if the assessee of the type referred to in sub-cl. (i) is engaged in the manufacture of any articles in an industry specified in the First Schedule to the Industries Act, 1951, if the assessee has exported after 28th day of February, 1963, such articles out of India. It is not in dispute that the assessee in the instant cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely 28. Vegetable oils and Vanaspathi: (1) Vegetable oils, including solvent extracted oils. (2) Vanaspathi." Now, the contention which is advanced on behalf of the revenue by Mr. Joshi is that de-oiled cake on the export of which the assessee claims an additional export rebate is not an item to be found in the First Schedule and, therefore, the assessee will not be entitled to claim the benefit of sub-cl. (ii). On the other hand, Mr. Mehta, appearing on behalf of the assessee, contends that sub-cl. (ii) must be so read that it takes within it any article produced in the coarse of the manufacture of an article in the industry concerned and, therefore, since de-oiled cake is a by-product in the manufacture of vegetable oils and vanaspathi, the assessee would be entitled to claim the benefit of sub-cl. (ii). It is, however, further argued that when the same item is referred to in cl. (c), the reference to vegetable oils and vanaspathi must be read as carving out from the provisions of sub-cl. (ii) only a case of export of vegetable oils and vanaspathi alone and not the by-product. The argument of the learned counsel found favour with the Tribunal which has taken the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion apparatus, radio receivers, television sets and teleprinters. Item 7 is " Transportation " and under it there are 7 items such as, (1) aircraft, (2) ships and other vessels drawn by power, (3) railway locomotives, (4) railway rolling stock, (5) automobiles, (6) bicycles, and (7) others, such as fork lift trucks and the like. Now, it is no doubt true that under the definition clause in the Industries Act, 1951, a " scheduled industry " is defined as any of the industries specified in the, First Schedule. When it actually came to specifying the industries, the industries were mentioned with reference to the articles, in the manufacture of which that industry was engaged. This is made very clear and, indeed, the language appears to be unambiguous, when, while describing the industries, it was described as " any industry engaged in the manufacture or production of any of the articles mentioned in each of the following headings or sub-headings ". These words do not leave any room for doubt that what was contemplated by Parliament was to give a list of articles and any industry engaged in the manufacture or production of those articles was to be a scheduled industry within the meani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cl. (c) of cl. (5) of s. 2 of the Finance Act. We may, however, point out that Mr. Joshi has brought to our notice a decision of the Gujarat High Court in CIT v. Prakash Trading Co. [1980] 124 ITR 334. That was also a case where the assessee was claiming benefit of an additional rebate in respect of de-oiled cake under similar provisions, though for a different year. The Division Bench while construing sub-cls. (ii) and (iii) of cl. (a) of s. 2(5) of the Finance Act, 1966, which was similarly worded, pointed out that those clauses extended concession to the specified industries in reference to the articles manufactured by such industry. The Gujarat High Court, however, seems to have taken the view that though the assessee was claiming exemption under sub-cls. (ii) and (iii) because the industry of vegetable oil is an industry specified in the First Schedule and that the claim of the assessee was that it was manufacturing de-oiled cake which had been exported and it was, therefore, entitled to exemption from cl. (c), in view of item (8) in cl. (c), the exemption in respect of the entire industry of vegetable oil and vanaspathi, which is specified in item No. 28 of the First Sched ..... X X X X Extracts X X X X X X X X Extracts X X X X
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