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2015 (10) TMI 521 - AT - Income TaxAddition made on account of excise duty not included in the closing stock of the finished goods - CIT(A) deleted the addition - Held that:- Undisputedly section 145A of the Act was introduced w.e.f. 1.4.1999, therefore, it cannot be invoked for recasting the closing stock of the assessee. It is also an undisputed fact that the assessee has been following similar method of accounting in earlier years and no addition was ever made in the closing stock by the Assessing Officer. Unless and until it is entered on one side of an item of cost, it cannot be taken as a component of the value of the closing stock on the other side. It is also held that levy of excise duty is incomplete inasmuch as assessee under the Excise Act is not required to discharge the liability to pay duty levied upon the manufacture of excisable goods, till such goods are removed from factory premises or from the warehouse. The test to determine as to whether the liability had been incurred or not would be as to whether a corresponding right is available with the excise authority to enforce such a liability. Mere production or manufacture by itself would not be sufficient. Though there might be levy under section 3 of the Excise Act, yet neither the rate nor the value would be determinable till the point of time of removal of the excisable goods from the factory premises, hence, the scheme itself indicates that so far as an assessee is concerned, it incurs liability to pay excise duty only upon both the events taking place, namely manufacture and removal of excisable goods. This position has to be necessarily adopted considering that the duty of central excise is levied and collected on an advalorem basis. In other words, unless and until the value is known, the levy and collection would not be correct and valid. We have also carefully examined the order of the ld. CIT(A) and we find that the ld. CIT(A) has adjudicated the impugned issue judiciously in the light of the legal position. Since no specific infirmity has been pointed out in the order of the ld. CIT(A), we confirm the same. - Decided against revenue.
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