TMI Blog2022 (9) TMI 1329X X X X Extracts X X X X X X X X Extracts X X X X ..... h the manufacturing activity and similarly, the refund of the Central excise duty also has a direct nexus with the manufacturing activity. The issue of payment of Central excise duty would not arise in the absence of any industrial activity. There is, therefore, an inextricable link between the manufacturing activity, the payment of Central excise duty and its refund. In the circumstances, we are of the opinion that question must be answered in the affirmative in favour of the assessee - Also see SHREE BALAJI ALLOYS VERSUS COMMISSIONER OF INCOME-TAX [ 2011 (1) TMI 394 - JAMMU AND KASHMIR HIGH COURT] - Decided in favour of assessee. - ITA/140/2019 - - - Dated:- 26-9-2022 - THE HON BLE JUSTICE T.S. SIVAGNANAM And THE HON BLE JUSTICE SUPR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The short issue involved in this issue is whether the refund of excise duty obtained by the respondent/assessee could have been treated as profit from business and the assessee could have been granted the benefit of deduction under section 80IC of the Act. We find that identical issue was decided by the High Court of Gauhati in the case of Commissioner of Income-tax vs. Meghalaya Steels Ltd., 332 ITR 91 (Gauhati). The operative portion of the decision reads as follows :- 18. Insofar as the second question is concerned, the Central excise duty refund claimed by the assessee is on the basis of an exemption notification issued by the Ministry of Finance (Department of revenue) being Notification No. 32 of 1999 and Notification No. 33 of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity. The issue of payment of Central excise duty would not arise in the absence of any industrial activity. There is, therefore, an inextricable link between the manufacturing activity, the payment of Central excise duty and its refund. In the circumstances, we are of the opinion that question No. 2 must be answered in the affirmative in favour of the assessee and against the revenue. Identical view was taken by the High Court of Jammu Kashmir in ITA No.2 of 2010, dated January 31, 2010 in the case of Shree Balaji Alloys Ors. vs. Commissioner of Income Tax Anr., wherein it was held as follows :- 24) A close reading the Office Memorandum and the amendment introduced thereto with para No. 3 appearing in the Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el appearing for the respondents. The issue raised in these appeals is covered against the Revenue by the decision of this Court in Commissioner of Income Tax, Madras Vs. Ponni Sugars and Chemicals Ltd. , reported in (2008) 9 SCC 337, or in the alternate, in Commissioner of Income Tax Vs. M/s Meghalaya Steels Ltd. , reported in (2016) 3 SCALE 192. The appeals are, therefore, dismissed. No costs. As against the order passed in the case of Meghalaya Steels Ltd., the revenue had preferred appeal before the Hon ble Supreme Court in Commissioner of Income-tax vs. Meghalaya Steels Ltd., 383 ITR 217 (SC) and the appeal filed by the revenue was dismissed. Thus, the issue having been settled in favour of the assessee in the af ..... X X X X Extracts X X X X X X X X Extracts X X X X
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