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2014 (10) TMI 256 - HC - Income TaxBenefit of section 41(1) - Entitlement for refund on Conversion Unit - Cessation of liability or not - addition during the assessment year 1992-93 or assessment year 1994-95 - Whether the Tribunal was correct in holding that a sum is a contractual liability in terms of agreement between the assessee company and the conversion unit, even though the liability to assessee company arises only when the conversion unit pays the amount to the Central Excise Department – Held that:- The adjudication under the Central Excise Act vis-a-vis the Conversion Unit has taken place only in the hands of the Assistant Commissioner - It has also been mentioned that the Assistant Commissioner, Central Excise, did nothing more than indicating the parameters for determining or reckoning the excise duty - he directed that the nearest comparable unit must be taken as the basis for determining the excise duty for the products manufactured by the Conversion Unit. Barring that, he did not undertake any calculation or reckoning - It was only the Superintendent of Central Excise that had undertaken the entire exercise - once the respondent is relieved of the liability to pay the amount covered by bonds, Section 41 (1) of the Act gets attracted and the liability can be said to have ceased – assessee had to pay the tax on the amount, regarding which he cleared exemption in the returns for the earlier AYs - The only difference would be that since the actual determination emerged only in May, 1993, it shall be under obligation to reflect the same in the returns for the year 1994-95 - So the amount was ordered to be refunded – Decided against revenue.
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