TMI Blog2017 (4) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (d) to sec. 80IA(4) required to be upheld - Decided in favour of assessee. - ITA No. 178/VIZ/2016 - - - Dated:- 19-4-2017 - SHRI V. DURGA RAO, HON BLE JUDICIAL MEMBER SHRI G. MANJUNATHA, HON BLE ACCOUNTANT MEMBER Assessee by : Shri Madhur Agarwal Adv. Department By : Shri Gurusamy CIT DR ORDER Per V. Durga Rao, Judicial Member This appeal filed by the Revenue is directed against the order of the ld. CIT(A)-1, Visakhapatnam, dated 09/02/2016 for the Assessment Year 2012-13. 2. Facts of the case, in brief, are that the assessee is engaged in the business of operation of Container Freight Station (CFS), filed its return of income, by declaring NIL income after claiming deduction under section 80-IA(4) of the Act. The Assessing Officer has called the assessee to justify the claim under section 80-IA(4) of the Act. The assessee before the Assessing Officer contended that section 80-IA has been amended by the Finance Act, 2000 as per CBDT Circular No. 739 dated 23/06/2000. The port trust could be certified structures near the port for benefit under section 10(23G) and 80-IA of the Act. The assessee has obtained the said certificate from the port of V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A common user facility with public authority status (emphasis supplied) equipped with fixed installations and offering services for handling and temporary storage of import / export laden and empty containers carried under customs control and with Customs and other agencies competent to clear goods for home use, warehousing, temporary admissions, re-export, temporary storage for onward transit and outright export. Transshipment of cargo can also take place from such stations. DEFINITION OF CFS : A container Freight Station may be defined as : Container Freight Stations are specified as customs area under Clause (b) of the said Section 8 wherein imported goods or export goods are ordinarily kept before clearance by the customs. Firstly, CFS do not have public authority status whereas ICD is a place that acts as a self contained Customs Station as categorically spelt in Circular of CBEC dt.8.6.2009. Further the said circular clearly distinguishes ICD and CFS and makes it very obvious that CFS is nothing but a warehouse. Distinction between ICT CFS : Inland Container Depot is a place that acts as a self contained customs stations like a port or ai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / LCS to which the said CFS is attached. In the case of Customs Stations having facility of automated processing of documents, terminals are provided at such CFSs for recording the result of examination, etc. In some CFSs, extension Service Centers are available for filing documents, amendments etc. However, the assessment of the documents etc is carried out centrally. An ICD may also have a number of CFSs attached to it within the jurisdiction of the Commissioner of Customs just as in the case of a port and its CFSs (as on date there are 28 CFSs linked to Chennal port) (Refer Circular No. 19/2009-Cust., dated 8-6-2009). A standalone Customs clearance facility in an inland Commssionerate cannot be approved by the Commissioner as a CFS, if there is no ICD / port within its jurisdiction to which the said CFS can be attached. Such a facility can, however, be notified as an ICD i.e., as an independent Customs station with provision for filing and assessment of documents and examination of goods. A customs clearance facility could be established as a CFS at a port city for examination of imported / export goods, since the CFS would fall under the jurisdiction of Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, the Department of Commerce, Infrastructure Division, Ministry of Commerce and Industry approved the proposal of the assessee for setting Up of CFS at I-/aId/a for handing import/export of cargo subject to execution of certain documents and compliance of other terms and conditions as stated in the letter; The Id. Counsel for the assessee has p/aced on record letter dt. 27-05-2003 from the Ministry of Commerce and Industry permitting the assessee to set up CFS at fr/aid/a. The contents of the letter are reproduced herein below: NoJ6/6/2003-Znfra-Z Government of India ministry of Commerce industry Deptt. of Commerce Infrastructure Division ***** Udyog Bhawan, New Delhi Dated the 27th May, 2003. To The Director, M/s. AL Logicstics Pvt. Ltd, Chenni. Subject : Setting up of an CFS at Haldia Sir, I am directed to refer to your application dated 8.22003 on the above subject arid to say mat the Government has approved your proposal for setting up of an Container Freight Station at Haldia for handling import and export cargo. The approval is subject to the following terms and conditions:- a) The Letter of Intent holder shall take adequate steps to create prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the assessee is providing CFS facility in accordance with the conditions laid down by the Government. In such circumstances there is no need to insist for the specific execution of agreements. The coordinate bench of the Tribunal in the case of United Liner Agencies of India (P.) Ltd (supra), has taken a similar view, Where no specific agreement with the State Government was entered into but from the approvals granted to the assessee it was inferred that assessee should be deemed to have entered into an agreement with the State Government. Thus, we are of the considered view that the assessee has complied with all the provisions of section 80IA(4)(i) and is eligible to claim deduction under the said section. The impugned order is set aside. The appeal of the assessee is allowed. Respectfully following the Coordinate Bench order, we hold that the contention of the AO that there is no agreement and hence the assessee is not eligible for exemption is not the correct position of law. The Hon ble Delhi High Court in the case of Container Corporation Ltd. (supra) held as follows: The term infrastructure facility was defined in section 80- IA(12)(ca) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f including inland port as an infrastructure facility and also that customs clearance also takes place in the inland container depot, the assessee s claim that the inland container depots were inland ports under Explanation (d) to sec. 80IA(4) required to be upheld. The issue has also been clarified by the Government vide CBEC circular no. 18/2009 dated 08/06/2009. Respectfully following the above decisions, we allow this appeal of the assessee. 4. On being aggrieved, the Revenue is in appeal before the Tribunal. 5. At the very outset, learned counsel for the assessee submitted that the issue involved in this appeal is squarely covered by the decision in assessee s own case for the Assessment Year 2011-12 and the ld.CIT(A) by following the order of the Tribunal, allowed the claim under section 80-IA(4) of the Act. He relied upon the decision of Hon'ble Bombay High Court in the case of CIT-II vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. reported in [2015] 59 taxmann.com 78 (Bombay) and also the decision of Hon'ble Madras High Court in the case of CIT vs. A.L. Logistics (P) Ltd. reported in [2015] 55 taxmann.com 283 (Madras). 6. On the other h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ests, Bills of entry, Shipping bills and other declarations, assessment and all the activities related to clearance of goods for home use, warehousing, temporary admissions, re-export, temporary storage for onward transit and outright export, transhipment, etc., takes place. Container Freight Stations are specified as customs area under Clause (b) of the said Section 8 wherein imported goods or export goods are ordinarily kept before clearance by the customs . An ICD is a 'self contained Customs station' like a port or air cargo unit where filing of Customs manifests, Bills of Entrys, Shipping Bills and other declarations, assessment and all the activities related to clearance of goods for home use, warehousing, temporary admissions, re-export, temporary storage for onward transit and outright export, transshipment, etc., take place. An ICD would have its own automated system with a separate station code [such as INTKD 6, INSNF6 etc.] being allotted by Directorate General of Systems and with in-built capacity to enter examination reports and enable assessment of documents, processing of manifest, amendments, etc. Container Freight S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction of the concerned Customs Commissionerate in addition to existing CFSs. Such an ICD should be capable of providing full-fledged Customs services, independent EDI system, and all procedures meant for transhipment of cargo have to be followed for movement of goods from the port of import to the ICD. Further, such an ICD would function as an independent Customs Station in all respects and would not be attached to any other port or airport. Thus, in respect of proposals for setting up of ICD/Container Freight Station from prospective operators it has to be examined whether the proposed facility is required to be approved as an ICD or CFS. Movement of goods from a port/airport/LCS to an ICD is in the nature of movement from one Customs station to another, governed by Goods Imported (Condition of Transhipment) Regulations, 1995. On the other hand, movement of goods from a port/airport/LCS or an ICD to a CFS is akin to local movement from a Customs area of the Customs station to another Customs area of the same station, covered by local procedure evolved by the Commissioner of Customs and covered by bonds, bank guarantee, etc. Further, the person undertaking the tranship ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntainer Depots I Container Freight Stations (ICDs/CFs) within a period of one year from the date of issue of this letter. (b) Necessary bond and guarantees, as required, would be executed with the concerned Commissioner of Customs and Central Excise. (c) The approval would be subject to cancellation in the event of violation of the Customs and other laws of the land and Rules. (d) A quarterly progress report of the implementation shall be sent to the Ministry of Commerce. (e) The working of the CFS will be open to review by the Inter Ministerial Committee. (f) Formalities in respect of acquisition/possession of the land shall be completed within 60 days and intimated to the Mlo Commerce, failing which the approval granted would be automatically cancelled. 2. The facility to be set up shall be fully computerized, with EDI compatibility and a minimum complement of equipment and accessories as necessary shall be made available at the facility. The indicative list of equipment/accessories considered necessary is annexed. The status regarding confirmation of the installation! availability of the items shall be furnished to the appropriate authorities to fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of a similar nature as may be notified by the Central Board of Direct Taxes. The Finance (No. 2), 1998, included the words Inland water ways and inland ports in the definition of infrastructure facility in sub-section (12), clause (ca), with effect from April 1, 1999. When the entire section was recast and even after several amendments were thereafter made to the section, inland ports continued to enjoy the dededuction as infrastructure facility. There is no definition of the words inland ports in any of the dictionaries. But the words inland container depot were introduced in sec. 2(12) of the Customs Act, 1962, which defines customs port . This was by way of an amendment made by the Finance Act, 1983, with effect from May 13, 1983. Simultaneously, clause (aa) was inserted in sec. 7(1) of the Act under which the CCHI issue notification appointing the places which alone shall be considered as inland container depots for the unloading of imported goods and loading of exported goods. The Central Board of Excise and Customs issued a clarification that inland container depots were inland ports. The power to notify infrastructure facilities for the purpose of the section w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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