TMI Blog2013 (6) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... f Customs & Central Excise Range Kotdwar, other documents like order of the Commercial Tax Department, Uttarakhand u/s 25 (7) and Section 9(2) by Shri S.S. Negi, Deputy Commissioner, Vanijya Kar, Kotdwar, where the tax liability by the assessee has been decided decalring product is self produced perfumery oil. The tax liability of the assessee had been made of ₹ 94,64,794/- and after making the adjustment to a prepaid taxes of ₹ 8,11,044/-, the balance was to be paid. In this order, the details of the raw material also elaborated, i.e. the Jari Booti, DOP, LLD, Gas, Packing Material and Imported Perfumery Compound. The assessee has also filed request dated 07.12.2006 for obtaining no objection certificate from Fire Department again mentioning the place of the industry at B-14, Balbhadrapur Industrial Area, Kotdwar also confirmed by no objection certificate from the Fire Department. Revenue had not established any thing contrary to these documents. The assessee has also placed documents with regard to the dispatch of finished goods by railway parcel bill from Kotdwar to Delhi establishing that product was sold out and also dispatched from Uttarakhand. Confirmations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chase of raw materials and sale of finished goods, it was not possible to manufacture the articles shown by the assessee in the return of income. The Assessing Officer concluded that the assessee has not carried out any manufacturing activities at the factory premises at B-14, Balbhadrapur Industrial Area, Kotdwar during the relevant period. The deduction u/s 80IA was denied. The CIT (A) confirmed the action of the Assessing Officer by holding as under :- "5.3 The submissions of the Appellant and the finding of the Ld. A.O. have been considered. The main controversy revolves around the fact of whether the assessee was carrying out some activity which amounted to "manufacturing" to enable him to claim relief u/s 80IC of the Act. The facts brought on record by the Ld. AO have not been effectively controverted by the Appellant since the rather odd circumstances, whereby the entire production for the year takes place in the month of March within the span of less than a week (between 24.03.2009 to 28.03.2009), have not been explained by the Appellant. It is hard to believe that the entire years production is accounted for in the last week of March, 2009 only and sales also made thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in manufacturing of perfumery/aromatic compound at B-14, Balbhadrapur Industrial Area, Kotdwar, Uttarakhand. Assessee earned the good profit by mixing the blending various aromatic substances. 'Rose Kashmir' was the main raw material purchased during the year. It is a perishable item, hence, required to be processed quickly. Herbs and spices are crushed/chopped. Boiled in copper vessel and the mixing and blending of various aromatic substances takes place. It requires minimum rudimentary utensils. It does not require much of electricity. As per the production flow chart, the inputs are mixed and blended, then packed. Quality is tested and product is labeled. Thereafter, final product essential oil is sold out. 4. While pleading on behalf of the assessee the ld. AR submitted that during the assessment proceedings, the assessee has submitted monthwise sales and purchases, quantitative details of stock and valuation, confirmations from debtors and creditors like NMJ Essential Oils Co., Raj Perfumery Foods Products, Alliancz Polychem Overseas Ltd., Shree Raj Exports and Seth Brothers. The evidence for running the factory and the letter from the Fire Office, Kotdwar was also enclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.71,11,368/- and form no.16 issued by VAT Department for showing receipt of goods are also placed at pages 55 to 57 and page 58 of paper book-I respectively. The process of manufacturing is also placed at pages 59 to 62 pages of paper book-I. Certificate issued by Chartered Engineers in respect of production of finished goods was also placed at page 83 of paper book-I. Certificate from M/s. Essential Oils Association of India is also placed at page 84 of paper book-I. Electricity Bills were also placed at pages 50 to 53 of paper book-I. Other evidences like bank statement at pages 63 - 64 and 105 - 106 of paper book-I and confirmation of debtors at pages 66, 68 69 of paper book-I are placed. The raw material was purchased from concerns who have no relation with the assessee. The assessee has also been allowed claim of depreciation respect of fixed assets used in the manufacturing activity. The CIT (A)'s view that assessee is engaged in blending and not manufacturing has overlooked the judgment of Hon'ble Apex Court in the case of CIT vs. Vinbros and Co. - 349 ITR 697 wherein it has been held that blending amounts to manufacture. In that case, the question was involved whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e central sales-tax @ 1% of the sales. With regard to water connection. Ld. AR submitted that since the assessee was using the rented premises, the water connection was not in its name. Ld. AR further pleaded that the assessee has been already allowed deduction u/s 80IC of Rs.84,33,581/- in the Assessment Year 2007-08. As per rule of consistency, the assessee deserves to deduction u/s 80IC for this year also as there is no change in the facts of the case. There is no change in the law also. The revenue authorities cannot allow to re-appreciate or re- interpretate the provisions of law. For this, the ld. AR relied on the following decisions :- (i) CIT vs. Jagson International Limited - 214 CTR 227 (Del.); (ii) CIT vs. Saurashtra Cement and Chemicals Industries Limited - 123 ITR 669 (Guj.); (iii) CIT vs. Paul Brothers - 216 ITR 548 (Bom.); and (iv) CIT vs. Western Outdoor Interactive (P.) Ltd. - 349 ITR 309. Finally, ld. AR submitted that assessee was engaged in the manufacturing activity during the relevant period at Kotdwar, Uttaranchal where 100% profit of the unit are eligible for deduction u/s 80IC. He finally pleaded to set aside the order of the authorities below. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent product. The distilled oil which is used as a raw material in the processing unit of the assessee situated in Uttarakhand is available in the market. The assessee instead of purchasing the same from the market, assessee gets the same processed in the State of Uttar Pradesh. It is used as a raw material in the industrial unit at Uttarakhand. The revenue's appeal was dismissed by Hon'ble Court. Ld. AR submitted that issues raised by revenue are covered by Hon'ble jurisdictional High Court. Finally, he pleaded to set aside the order of authorities below. 7. We have heard both the sides on the issue. We have also perused the documents placed in the paper book. We have also gone through the case laws relied upon by both the sides. The assessee firm came into existence on 24.11.2006. This was the third year of the existence of the assessee firm. The assessee has filed the various documents to establish that it was engaged in the business of manufacturing of perfumery/aromatic compounds at B-14, Balbhadrapur Industrial Area, Kotdwar, Uttarankhand. The copy of licence from Directorate of Industry, Kotdwar is placed at page 161 of the paper book which shows that the assessee was cate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods by railway parcel. Copy of the sale invoices is placed at pages 33 to 37 of the paper book. Page 38 of paper book is the railway parcel way bill from Kotdwar to Delhi. In this document, the product is shown as natural perfumery compound. These facts establish that product was sold out and also dispatched from Uttarakhand. The assessee also submitted quantitative details of stock. Confirmations from debtors and creditors are also filed before Assessing Officer and placed at pages 65 to 69 of the paper book. The Assessing Officer had not questioned the veracity of these sale bills. The amount of sale has not been investigated by Assessing Officer. The assessee also submitted the rent agreement in respect of the factory. The main raw material was Rose Kashmir which was used in production of perfumery compound along with Jari Booti, DOP, Gas, Small Drum and P. Compound. The assessee has also placed certificate from Chartered Engineers in respect of the production of finished goods in short period wherein the process of mixture of all the material is boiled in a vessel through gas or fire wood heat treatment process and vapor generated in this process which is called extract. The u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usion that the largest manufacturing activity takes place outside the State of Uttarakhand. A look at the flow-chart will clearly demonstrate that the basic ingredient for manufacturing the ultimate product sold by, the ,assessee is distilled oil. There is no dispute that this distilled oil is obtained by the assessee from the State of Uttar Pradesh. At the same time, there is no dispute that the assessee does not purport to sell the distilled oil by purporting to show that the same is manufactured in its factory at Uttarakhand. There is no dispute that with the distilled oil, thus procured, many a things are required to be mixed. Then, those are to be processed, first by roasting and, then, by mixing with proportionate amount of water. The product, then available, is then required to be steamed distilled and the, vapours are made to condense. The condensed vapour is absorbed in the oil and the process requires repetition for the purpose of reaching perfection. That, at its industrial unit situate within the State of Uttarakhand, assessee undertakes those steps to obtain the product it sells, is not disputed in the appeal. A look at the flow-chart would amply demonstrate that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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