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TMI Blog1984 (12) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... ich had actually become bad during the relevant previous year after satisfying himself, whether the advances were given to genuine parties and whether a portion of the advances had become irrecoverable during the previous year. The ITO completed the reassessment on 4-12-1982, allowing the assessee's claim. The assessee raised a fresh plea before the ITO that the sum of Rs. 8,26,474, representing credit for excise duty received from the Central excise authorities, was not taxable income. The ITO in a very brief order, rejected this contention, stating that the said sum was not entitled to exemption under section 10(3) of the Income-tax Act, 1961 (' the Act ') in view of the decisions of Ludhiana Central Co-operative Consumers' Stores Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the corresponding period in 1964, a graduated exemption was given as under : (i) on the first 10 per cent of such total excess production, exemption to the extent of 20 per cent on the basic excise duty ; (ii) on the next 10 per cent of such excess production exemption to the extent of 40 per cent of the basic excise duty ; (iii) on the balance of such excess production, 50 per cent of the basic excise duty ; was to be exempt. On the basis of the notification, the assessee received credit notes from the Central Excise Department for Rs. 8,26,474. This was taken into account by the assessee on 30-9-1965. The result was the payment of excise duty which the assessee had to make on the quantity of sugar produced between 1-9-1965 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the rebate granted, the assessee cannot claim to take credit for rebate, refund or credit note for excise duty in its accounts. He submitted that the customers did not know that the assessee was entitled to rebate in excise duty. Excise duty stood on a footing quite different from sales tax. Sales tax was payable by the customer, but collected and paid by the dealer. The payment of Central Excise duty was primarily the responsibility of the manufacturer. The moment, the goods were manufactured and taken out of the factory, excise duty was attracted. This was the liability of the assessee. No customer will never be able to know, from which stock he has been supplied sugar. The customer will not be in a position to know that the supply to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement with the arguments advanced by the learned departmental representative. There is no contract between the assessee and its customers for refunding any refund or rebate in excise duty received by it. As pointed out by the learned departmental representative, there is no correlation between the stock received by the customers and the stock on which rebate in excise duty was given. As rightly pointed out, the excise duty was duly paid on the production is not refunded, but the duty payable by the assessee on future production is reduced by a quantity determined with reference to the excess production. Therefore, it is wholly appropriate to look at the problem from the payment side and not from the receipt side. In this view of the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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