9911796707
TMI Blog1986 (3) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2. On 16-7-1980, the assessee received an order from the Central Board of Excise and Customs, classifying Latex Foam Seats manufactured by the assessee as Motor Vehicle Seats and not as 'Latex Foam'. On account of this classification, excise duty was payable at 10 per cent. If the latex Foam Seats had been classified as 'Latex Foam' excise duty would have been payable at 60 per cent. Thus, the above order of the Central Board of Excise and Customs was favorable to the assessee. Prior to that order dated 16-7-1980, the assessee had been paying excise duty at the rate of 60 per cent under protest. Subsequently, the assessee received an order dated 30-12-1980, from the Government of India, Ministry of Finance seeking review of the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Board dated 16-7-1980, had been stayed by the High Court, and, as such, there was no existing liability in respect of the said amount. The liability, if any, was a contingent liability for which no deduction was allowable. The learned representative for the assessee has challenged the validity of these reasons for disallowing the claim, while the departmental representative had relied on these reasons to support the order of the lower authorities. 4. We have considered the rival submissions and facts brought on record. In addition to the facts narrated above, we may here refer some additional facts. The question whether the rate of 60 per cent of 10 per cent was applicable in respect of Latex Foam Seats was subject matter of consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6] 105 ITR 864 (All.). As regards unadmitted liability forexcise duty, an assessee incurs an enforceable legal liability on and from the date on which he receives the demand for payment and that neither the endeavor made by the assessee to get out of then liability by preferring appeals to the statutory authorities, in any way detract from or retard the efficacy of the liability imposed upon the assessee - Pope the King Match Factory v. CIT [1963] 50 ITR 495 (Mad.). Similarly, the fact that upon objection by the assessee, the authorities agreed, in a subsequent year to reduce the duty would not affect the assessee's right to claim the deduction. This was laid down by the Bombay High Court in Shrikant Textiles v. CIT [1971] 81 ITR 222. In L. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact of the assess. No prudent businessman would fail to make the provision for such liability in these circumstances. Consequently, the said liability must be held to be a liability which had arisen in the relevant accounting year and under the mercantile system of accounting deduction in respect of the said liability was allowable particularly when a provision had been in the accounts. The fact that the assessee was challenging the said liability in the writ petition would not make any difference in the legal position. Similarly, the fact that the High Court had granted stay of operation of the order of the Government would also not make any difference. This is because the order of the stay is an interim order. By that order the dispute h ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
