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2004 (8) TMI 29 - PUNJAB AND HARYANA HIGH COURTCessation of liability - Assistant Collector required the assessee to produce the necessary evidence to establish that the excise duty in question was not leviable on the assessee and indicated his intention that if the assessee did not have any sufficient evidence in support of its claim for refund, the refund already sanctioned would be liable to be recovered under rule 10 of the Central Excise Rules, 1944. The Assessing Officer, however, treated the amount of refund of Rs. 2,14,131 as income under section 41(1) of the Income-tax Act, 1961 - Tribunal examined the provisions of section 41(1) of the Act and observed that the liability in respect of excise duty had not finally ceased - It is evident that in view of the show-cause notice issued by the Assistant Collector dated November 23,1977, the issue of refund to the assessee itself was in dispute and, therefore, it could not be said that there was a final cessation of liability which is a necessary prerequisite for invoking the provisions under section 41(1) – revenue appeal dismissed
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