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2014 (9) TMI 883 - ANDHRA PRADESH HIGH COURTRefund of customs duty as part of incentive measure – Capital or revenue in nature - Whether the refund of customs duty received by the assessee on the imported components/machinery for their fertilizer plant pursuant to the notification of the Ministry of Fertilizers & Chemicals, Government of India is to be treated as a capital receipt or as a revenue receipt – Held that:- The Tribunal was rightly of the view that the amount received has gone into the reduction of capital expenditure in the establishment/expansion of the fertiliser units - the subsidy received by the assessee in fact had gone into reduction of the capital expenditure - The fact that incidentally on account of reduction in the capital cost the assessees product would be more competitive in the market thereby increasing their revenues would not in any way alter the position that the subsidy received as a matter of fact had gone to reduce the cost of the capital - the finding of the Tribunal that the amounts received by the assessee from the Central Government by way of refund of customs duty of the capital receipts cannot be found fault – Decided against revenue.
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