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2015 (3) TMI 1019 - AT - Income TaxConcealed sales of scrap - assessee could not give evidence regarding non return of the scrap by the vendors/subvendors doing job work for and it is most unlikely that assessee will allow vendors/sub-vendors to keep scrap with them, on which it is paying excise duty itself. - CIT(A) deleted the addition - Held that:- No infirmity in the order of the learned CIT(A) inasmuch as nothing has been brought on record by learned Assessing Officer that the assessee's job workers returned any scrap to assessee. Nothing has also been brought on record to demonstrate in any way that assessee indulged in any sale of scrap outside the books of account. This is further indicated by new Cenvat Credit Rules, which holds that the scrap was not required to be returned to the assessee. The same is referred to by the judgment in the case of M/s Rocket Engineering Corporation Vs. CCE (2005 (6) TMI 184 - CESTAT, MUMBAI). The assessee further provided evidence from M/s Noble Industries, which has done a job work of 3.56 crores and has shown the income attributable to sales of scrape of ₹ 747109/-, in its books. These facts and observations demonstrate that the assessee did not receive any scrap back from job workers. There being no evidence whatsoever suggesting any unaccounted sales by the assessee, the order of learned CIT(A) on these issues is upheld. - Decided in favour of assessee. Unaccounted sale of scrap - the balance amount to difference shown by the assessee as receivable from SKF and the payable amount in the books of SKF - CIT(A) deleted the addition - Held that:- The assessee has demonstrated that the difference was due to the disputes pertaining to defective and inferior quality of goods. The assessee used to account for the actual invoice value whereas the purchases were accounted by SKF not on the basis of the sales bills but on the basis of settled amounts qua these invoices. All these issues have been discussed in details by the learned CIT(A) as mentioned above. In view thereof, we see no infirmity in the order of the learned CIT(A) on this issue also, which is upheld. - Decided in favour of assessee. Excise duty on sale of scrap paid by the assessee - CIT(A) deleted the addition - Held that:- the assessee demonstrated that as per Rule 4(6) of the Central Excise Rules, the assessee was liable for excise duty on the notional value of nonreturnable scrap. Thus, the assessee has to face the situation where the scrape was not returnable to it and on top of that the excise duty on such scrape was also payable by the assessee as per excise rules. In view thereof, the excise duty in respect of unreturned scrap becomes a statutory/legal liability of the assessee, which is allowable business expenditure. The learned CIT(A) has considered the issue in right perspective and we see no infirmity in its order on this ground, the same is upheld.- Decided in favour of assessee.
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