TMI Blog2025 (1) TMI 1235X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Duty refund received by the assessee is in the nature of capital receipt not exigible to tax.
Thus, we hold that the excise duty refund received by the assessee is in the nature of capital receipt not chargeable to tax. Appeal of the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... under:- a) It shall apply only to new industrial units which are set up on or after 31.7.2001 in the Kutch District but before 31.7.2003. b) The assessee had undisputedly set up an eligible unit and entitled to the incentive under Notification No. 39/2001 dated 31.7.2001. c) The manufacturer shall produce a certificate from a Committee consisting of the Chief Commissioner of Central Excise, Ahmedabad and the Principal Secretary to the Government of Gujarat, Department of Industries, to the jurisdictional Central Excise Officer certifying that the unit in respect of which exemption is claimed is a new unit and has been set up on or after 31.7.2001 but not before 31.7.2003. d) The manufacturer is first required to pay excise duty with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee raised an additional ground claiming the said receipt to be capital receipt not chargeable to tax. The Id. CIT(A) after calling for a remand report from the Id. AO admitted the said additional ground, being legal in nature and by applying the 'purpose test' of the Incentive Scheme 2001 held that the excise duty refund received by the assessee is not liable to tax as it is in the nature of capital receipt. 4.4. We find that the appellate authorities are duly entitled to admit the additional ground if it is legal in nature and goes to the root of the matter and not requiring verification of fresh facts. All the facts relevant for adjudication of the said additional ground was already available on record before the Id. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regard is placed on the decision of Hon'ble Supreme Court in the case of CIT vs Ponni Sugars and Chemicals Ltd reported in 306 ITR 392 (SC). We find that the Id AR before us relied on the decision of Hon'ble Gujarat High Court in the case of SAL Steel Limited vs Union of India reported in Special Civil Application No. 6299 of 2008 and 5909, 6300, 6298, 5907, 8468, 6334 and 6562 of 2008 dated 18.3.2010. In our considered opinion, this decision relied by the Id. AR clearly brings out the purpose behind the excise duty exemption issued by the Government to achieve a larger public interest of incentivizing setting up of industries in the Kutch District of Gujarat in the wake of massive earthquake in the said region so as to generate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it was contrary to the principles of promissory estoppel. Further it was clearly held by the Hon'ble Gujarat High Court that the purpose of the original notification issued in the year 2001 was to incentivize and promote setting up of industries in the Kutch Region of Gujarat thereby clearly satisfying the 'purpose test' thereon. Hence it could be safely concluded that the excise duty refund received is clearly in the nature of capital receipt not chargeable to income tax. We find that the Id. CIT(A) had rightly decided the issue in favour of the assessee and we do not find any infirmity in the said order granting relief to the assessee. Accordingly, the Ground No. 2 raised by the revenue is dismissed." 4. We observe that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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