9911796707
TMI Blog2008 (10) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... relates to assessment year 1998-99 and ITA 289/2007 relates to the assessment year 2000-01. In all these appeals the following substantial question of law has been framed for determination:- "Whether the Tribunal was correct in law in holding that MODVAT credit has not to be included in the total turnover for the purposes of computing the eligible deduction under Section 80HHC of the Income-tax Act, 1961'" 2. It is not necessary for us to set out the facts in respect of each of the assessment years. It is sufficient to note that the assessee claimed deduction under Section 80HHC of the said Act. The claim of deduction by the assessee was based on a computation of total turnover which did not include the amount of modvat credit which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods from the customs stations. Mrs Bansal, appearing on behalf of the revenue, submitted that only the specific items of freight and insurance as indicated in the said Explanation (ba) could be excluded from total turnover. Since modvat credit was not specifically mentioned as an excluded item, it had to be included in total turnover for the purposes of Section 80HHC. The learned counsel for the Assessee submitted to the contrary. 5. We may note that when these appeals were admitted and the question noted above had been framed, the decision of the Supreme Court in the case of Commissioner of Income-Tax v Lakshmi Machine Works: [2007] 290 ITR 667 (SC) had not been rendered. Prior to the said decision of the Supreme Court, there were deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation (ba) to Section 80HHC. It was contended that since only insurance and freight were to be excluded, it was not open to the Courts to exclude excise duty and sales tax from the concept of 'total turnover' in the formula to be implied under Section 80HHC. This argument was rejected by the Supreme Court in Lakshmi Machine Works (supra). The position is, therefore, clear. Excise duty is not to be included in computing 'total turnover' for the purposes of arriving at the deduction which an assessee can claim under Section 80HHC. 7. In the present case, the question relates to the inclusion or exclusion of modvat credit. In Ichalkaranji Machine Centre Pvt. Ltd. v. Collector of Central Excise, Pune: 2004 (174) ELT 417 (SC) the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yable by him on his final products. Thus, the moment the modvat credit taken by the manufacturer is adjusted against the excise duty payable by him in respect of his final product, his liability to pay excise duty to that extent stands discharged. In Eicher Motors Ltd v. Union of India: (1999) 2 SCC 361 and in CCE v. Dai Ichi Karkaria Ltd : (1999) 7 SCC 448 the Supreme Court observed that a credit under the MODVAT Scheme was 'as good as tax paid.' In other words, an adjustment of modvat credit essentially entails the payment of excise duty. 8. We have already noted above that excise duty, in view of the Supreme Court decision in the case of Lakshmi Machine Works (supra), is not to be included in computing 'total turnover' for the purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
