TMI Blog2015 (3) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... after being partially processed. Learned counsel also referred to various invoices to demonstrate that all the invoices contained inputs sold as such without processing, which entitled the assessee to claim Cenvat credits. We find that no discrepancy has been pointed out by the Assessing Officer in these documents filed by the assessee. The findings of the learned Commissioner of Income-tax (Appeals) have not been controverted. - Decided against revenue. - ITA No. 1260/Del/2013 - - - Dated:- 18-7-2014 - SHRI S.V. MEHROTRA AND SHRI A.T. VARKEY, JJ. For the Appellant : Shri A. Mishra CIT (DR) B. Srinivas Kumar DR For the Respondent : Shri S.K. Bajaj CA ORDER S. V. Mehrotra (Accountant Member).- This appeal, by the Department, is directed against order dated December 27, 2012 passed by the learned Commissioner of Income-tax (Appeals)-VI, New Delhi in appeal No. 242/11-12 relating to the assessment year 2009-10. 2. The brief facts of the case are that the assessee in the relevant assessment year was engaged in manufacture of environmental control devices, which comprised of dehumidifiers, heat recovery systems, plastic dryers, etc. The assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 69,40,81,281 Less : Sales of manufactured goods shown in 16(A) of Schedule-20 68,77,64,620 Less : Sales of traded goods shown in 16(B) of Schedule 20 63,16,661 69,40,81,281 Difference Nil Reconciliation of closing stock of finished and traded goods Manufactured goods as per Schedule-7 1,69,39,792 Traded goods as per Schedule-7 42,16,005 2,11,55,797 Less : Closing stock of manufactured goods shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omponents could not be reduced while calculating the raw materials consumed for production of finished goods. 2.4. It was explained that sale of raw materials of ₹ 1,68,83,741, which were sold after testing and processing excise duty as per law, had been charged on these components. The cost of material sold was included in material consumed. The Assessing Officer, however, did not accept the assessee's contention for the following reasons : The assessee in its letter dated December 21, 2011 has claimed that this reflects the sales value of components and spares made during the year. However, the same is not factually correct since the stock and production of goods manufactured during the year has been shown separately. It has specifically been mentioned in Schedule 20 in no uncertain terms that the sale of ₹ 1,68,83,441 represents the sale of 'raw materials' removed as such without any value addition. The assessee has claimed that the above is a result of misclassifi cation where the components and spares sold were shown as 'raw materials'. This contention of the assessee is not acceptable since in Clause 16 of Schedule 20, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or component on which the assessee had paid excise duty sold to the customers for maintenance of the equipment were classified as raw materials removed as such. Further, the assessee-company had charged excise duty on the material so sold which is evident from the invoices which were filed during the course of assessment proceedings. 2.8. The learned Commissioner of Income-tax (Appeals) deleted the addition for the following reasoning : (i) The confusion was caused because of various terminology used in Note 16 of Schedule 20 of the audited accounts. The classification of raw- material removed as such and spares in the said schedule had led to the impugned additions. Such classification cannot be the basis for making any addition. (ii) The basic issue is that the sales of all the items had been duly recorded in the books of account and had been reflected in the sales value of the audited accounts. The details of invoices and copies of bills had been filed which gave the description of the goods. (iii) Cost of all the material, i.e., raw material removed as such, components and trading goods had been duly and properly booked under the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... according to the specific machines. The assessee had classified its components under three heads, viz. raw material sold as such , components and traded goods . In order to appreciate the controversy, first of all we refer to the profit and loss account of the assessee, contained at page 14 of the paper book. In the profit and loss account, gross sales have been shown at ₹ 69,91,49,504, as per schedule 13 to the profit and loss account and the material consumption have been shown at ₹ 23,88,43,161 as per schedule 16 to the profit and loss account. The notes to the financial statements are contained in schedule 20. In schedule 13 (page 21 of PB), the gross sales have been shown as under : Schedule 13 Gross sales (Rs.) Operating sales - domestic sales 44,94,37,784 - export sales 24,46,43,497 - scrap sales 50,69,223 69,91,49,504 3.1. In Schedule 16, the consumption of material have been shown as under: Schedule 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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