LexCOMMISSIONER OF INCOME TAX II versus M/S MODJPON LTD.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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[2017] l l. S.C.R. 84
COMMISSIONER OF INCOME TAX II
v.
M/S MODJPON LTD.
·· 1 (Civil Appeal No. 19763 of 2017)
NOVEMBER 24, 2017*
[RAN.JAN GOGOi AND NAVIN SINHA, JJ.]
income Tax Act, 1961:
s.43B - Deduction under - Entitlement - Jn respect of excise
duty paid in advance in the Personal ledger Account (PLA) - Held:
Upon deposit in the PLA. the amount of such deposit stands credited
to the revenue v.1ith the assessee having no domain over the amount(s)
deposited - Therefore, advance deposit of central excise duty
constitutes ac/ual payment of duty within the meaning of s.43B and
hence assessee is entitled lo the benefit of deduction of the said
amount - Central Excise Act, 1944 - Central Excise Rules, 1944 -
1:173G
Dismissing the appeals, the Court
HELD: 1. The present challenge is entertainable so long
as it discloses a substantial question of law or an issue impacting
public interest or the same has the potential of recurrence in
future. The Revenue cannot be shut out from the present
proceedings merely because of its acceptance of the practice of
accounting adopted by the assessee or its acceptance of the
decision of th~ two High Courts in question. An adjudication of
the question(s) arising cannot be refused merely on the above
basis.(Para 8.1189-C-DJ
2.1 Deposit of Central Excise Duty in the PLA is a statutory
requirement. The Central Excise Rules, 1944, specify a distinct
procedure for payment of excise duty Ieviable on manufactured
goods. It is a procedure designed to bring in orderly conduct in
the matter of levy and collection of excise duty when both
manufacture and clearances are a continuous process. Debits
against the advance deposit in the PLA have to be made of
amounts of excise duty payable on excisable goods cleared during
the previous fortnight. The deposit once made is adjusted against
* Judgment incorporating therein subsequent order dated 23/:!/2018 passed by a Bench
of Hon 'ble Mr. JU5tice Ranjan Gogoi and Hon 'ble Mrs. Justice R. Banumathi.
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COMMISSIONER OF INCOME TAX II v. M/S MODlPON LTD.
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the duty payable on removal and the balance is kept in the account
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for future clearances/removal. No withdrawal from the account is
permissible except on an application to be filed before the
Commissioner who is required to record reasons for permitting
an assessee to withdraw any amount from the PLA. Sub-rules
(3), (4), (5) and (6) of Ruic l 73G indicates a strict and vigorous
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scrutiny to be exercised by the central excise authorities with
regard to manufacture and removal of excisable goods by an
assessce. The self removal scheme and payment of duty under
the Act and the Rules clearly shows that upon deposit in the PLA
the amount of such deposit stands credited to the Revenue with
the assessee having no domain over the amount(s) deposited.
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[Para 9][89-E-H; 90-A]
Radhasoami Satsang v. C.I. T. (1992) 193 ITR 32 HSC);
C.I.T v. Excel Industries Ltd. (2013) 358 lTR 295 {SC):
C.K. Gangadharan and A111: i: C.l.T. (2008) 8 SCC 739:
[2008] 11 SCR 52 - referred to.
.2.2 Having regard to the object bt'llind the. enactment of
Section 43B, it would be consistent to hold that the legislative
intent would be achieved by giving benefit of deduction to an
assessce upon advance deposit of centra1 excise duty
notwithstanding the fact that adjustments from such deposit arc
made on subsequent clearances/removal effected from time to
time. [Para 11][90-E-Fi
C.I.T v. Maruti Suzuki India Ltd. (2013) 212 Taxman
603 (Del.); Punjab & Hcu:vana High Court in C.I.T v.
Happy Forgings Ltd. !TA No. 590 of 2007 decided by
the Punjab & Haryana High Court ori 11.07.2008;
C.l. T. v. Raj and San Deeps Ltd. (2007) 293 !TR 12;
C.I.T. v. Pandavapura Sahakara Sakkare Karkhane Ltd.
198 ITR 690 (Kar.); C.I.T. v. Nizam Sugar Factory Ltd.
253 ITR 68 (AP) - approved.
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3. The High Courts of .Delhi and of Punjab & Haryana were
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justified in taking the view that the advan~e deposit of central
excise duty constitutes actual payment of duty within the meaning
of Section 43B of Income Tax Act and, therefore, the assessee is
entitled to the benefit of deduction of the said amount. [Para
12][90-G-H; 91-A]
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SUPREME COURT REPORTS
[2017] t l S.C.R.
Case Law Reference
(1992) 193 lTR 321 (SC)
referred to
Para 6
(2013) 358 ITR 295 (SC)
referred to
Para 6
(2013) 212 Taxman 603 (Del.)
approved
Para 6
(2007) 293 ITRExcerpt shown. Read the full judgment & AI analysis in Lexace.