DCIT, Circle-3(1), Kolkata, Kolkata V. M/s Digboi Carbon Pvt. Ltd, Kolkata

ITA 1621/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1638 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 11-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G H SEEMA
• Section: 143(3); 80IB; 37

Judgement Text

1 ITA NO.1621/KOL/2016 DIGBOI CARBON (P) LTD., AYS- 2010-11 , D , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA () .., . ' # $% % , '() [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 1621/KOL/2016 ASSESSMENT YEAR: 2010-11 DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-3(1), KOLKATA. VS. M/S. DIGBOI CARBON (P) LTD. (PAN: AACCD2107L) APPELLANT RESPONDENT DATE OF HEARING 15.01.2018 DATE OF PRONOUNCEMENT 02.02.2018 FOR THE APPELLANT SHRI G. H. SEEMA, ADDL. CIT FOR THE RESPONDENT SHRI SUBASH AGARWAL, ADVOCATE ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-8, KOLKATA DATED 13.06.2016 FOR AY 2010-11. THE REVENUE HAS R AISED THE FOLLOWING GROUND: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING THE TRANSPORT SUBSIDY, POWER SUBSIDY, CENT RAL INTEREST SUBSIDY, UNDER THE SALES TAX RULES AS REVENUE RECEIPT WITHOUT BRINGING INTO RECO RD HOW THE IMPUGNED AMOUNTS OF RS.1,05,44,903/-, RS.3,12,920/- AND RS.2,23,776/-, TOTALING TO RS.1,10,81,559/- HAD BEEN EXACTLY THE SAME AS HAD BEEN DECIDED BY THE HONBLE SUPREME COURT IN THE CASE OF MEGHALAYA STEEL LTD. (CIVIL APPEAL NO. 7622 OF 2014 DATED 09. 03.2014). 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE A SSESSEE FILED ITS RETURN OF INCOME THROUGH E-FILING ON 20.09.2010 SHOWING NIL INCOME AFTER TAK ING THE DEDUCTION OF RS.1,51,90,403/- U/S. 80IC(B)(III) OF THE INCOME-TAX ACT, 1961 (HERE INAFTER REFERRED TO AS THE ACT). ASSESSMENT WAS MADE BY AO U/S. 143(3) OF THE ACT WH EREBY HE DENIED THE DEDUCTION U/S. 80IC OF THE ACT IN RESPECT OF THE FOLLOWING ITEMS: SL. NO. ITEM AMOUNT (RS.) (I) (II) (III) TRANSPORT SUBSIDY POWER SUBSIDY CENTRAL INTEREST SUBSIDY 1,05,44,903/- 3,12,920/- 2,23,776/- 2 ITA NO.1621/KOL/2016 DIGBOI CARBON (P) LTD., AYS- 2010-11 (IV) (V) VAT RECEIVABLE EXCISE REFUND TOTAL 69,44,125/- 55,61,071/- 2,35,86,795/- ON APPEAL, THE LD. CIT(A) ALLOWED THE GROUNDS OF AP PEAL OF ASSESSEE ON THE ISSUE OF DEDUCTION U/S. 80IC OF THE ACT IN RESPECT OF TRANSP ORT SUBSIDY, POWER SUBSIDY, CENTRAL INTEREST SUBSIDY AS REVENUE RECEIPT TOTALING TO RS. 1,10,81,559/- AS PER THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MEGHALAYA STEE L LTD. (CIVIL APPEAL NO. 7622 OF 2014 DATED 09.03.2014). AGGRIEVED, REVENUE IS IN APPEA L BEFORE US. 3. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE B ROUGHT TO OUR NOTICE THAT THE SOLE ISSUE IS COVERED BY THE COORDINATE BENCH DECISION IN ASSESSE ES OWN CASE FOR AY 2012-13 ORDER DATED 08.12.2017 WHEREIN THE ISSUE UNDER CHALLENGE HAS BEEN CONSIDERED AND THE ISSUES ARE NO LONGER RES INTEGRA SINCE THE LD. CIT(A) HAS RIGH TLY RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MEGHALAYA STEEL LTD. (SUPRA) AND GAVE RELIEF TO THE ASSESSEE. WE NOTE THAT THE ISSUES ARE COVERED IN FAVOUR OF TH E ASSESSEE IN ITS OWN CASE FOR AY 2012-13 ORDER DATED 08.12.2017 WHEREIN THE TRIBUNAL HAS HEL D AS UNDER: 6. AT THE TIME OF HEARING OF THE APPEAL IT WAS BRO UGHT TO OUR NOTICE THAT THE HONBLE SUPREME COURT IN CIVIL NO.7622 OF 2014 JUDGMENT DAT ED 09.03.2016 (SINCE REPORTED IN 383 ITR 158(SC) HAS UPHELD THE ORDER OF THE HONBLE GAU HATI HIGH COURT IN THE CASE OF MEGHALAYA STEELS LTD 332 ITR 91 (GAU) WHEREIN THE Q UESTION WHETHER DEDUCTION U/S. 80IC(2)(A)(III) OF THE ACT WOULD BE AVAILABLE TO VA RIOUS KINDS OF SUBSIDIES LIKE TRANSPORT SUBSIDY, POWER SUBSIDY, INTEREST SUBSIDY AND SUBSID Y IN THE FORM OF REFUND OF CENTRAL EXCISE DUTY WAS CONSIDERED AND IT WAS HELD THAT SUCH DEDUC TION ON THE AFORESAID SUBSIDIES SHOULD BE ALLOWED. IT WAS ALSO BROUGHT TO OUR NOTICE THAT CBD T HAS ISSUED CIRCULAR NO.39/2016 DATED 29.11.2016 WHEREBY THEY HAVE AFTER TAKING COGNIZANC E OF THE DECISION OF THE HONBLE SUPREME COURT REFERRED TO ABOVE, INSTRUCTED THE OFFICERS OF THE DEPARTMENT THAT SUBSIDIES OF TRANSPORT, POWER AND INTEREST GIVEN BY THE GOVERNMENT TO THE I NDUSTRIAL UNDERTAKINGS ARE RECEIPTS WHICH ARE REIMBURSED FOR COST OF PRODUCTION RELATING TO M ANUFACTURE OR SALE OF THE PRODUCTS AND THEREFORE HAVE A DIRECT NEXUS WITH THE PROFITS AND GAINS OF THE INDUSTRIAL UNDERTAKINGS. THE DEPARTMENT HAS ACCORDINGLY DIRECTED THE OFFICERS IN THE FIELD TO ALLOW DEDUCTION U/S 80IC OF THE ACT ON SUCH RECEIPTS ALSO. THE SAID CIRCULAR ALSO M ENTIONS THAT APPEALS FILED BY THE DEPARTMENT ON THE ABOVE ISSUE SHOULD NOT BE PRESSED . 7. WE FIND THAT THIS ISSUE HAS BEEN ELABORATELY DEA LT WITH BY THE HONBLE GAUHATI HIGH COURT IN THE CASE OF CIT VS MEGHALAYA STEELS LTD VI DE ORDER DATED 29.05.2013 WHEREIN THEIR LORDSHIPS HAD CLEARLY DISTINGUISHED THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF LIBERTY INDIA CASE AND IT IS PERTINENT TO GO INTO T HE OPERATIVE PORTION OF THE HONBLE GAUHATI HIGH COURTS DECISION IN RESPECT OF EACH CATEGORY O F SUBSIDY WHICH IS IN DISPUTE BEFORE US:- 1. TRANSPORT SUBSIDY 88. IN THE LIGHT OF WHAT HAVE BEEN DISCUSSED ABOVE , THERE CAN BE NO ESCAPE FROM THE CONCLUSION THAT TRANSPORT SUBSIDY WAS AIMED AT REDUCING THE COST OF PRODUCTION OF THE INDUSTRIAL UNDERTAKINGS COVERED 3 ITA NO.1621/KOL/2016 DIGBOI CARBON (P) LTD., AYS- 2010-11 BY TRANSPORT SUBSIDY SCHEME. THUS, THERE WAS A FIR ST DEGREE NEXUS BETWEEN THE TRANSPORT SUBSIDY, ON THE ONE HAND, AND COST OF PRODUCTION, ON THE OTHER. WHEN COST IS REDUCED, IT NATURALLY HELPS IN EARNIN G OF PROFIT AND, AT TIMES, HIGHER PROFITS. SUCH PROFI TS AND GAINS OUGHT TO HAVE BEEN TREATED, AND HAS RIGHTLY BEEN TREATED, BY THE LEARNED TRIBUNAL, TO B E PROFITS AND GAINS DERIVED FROM, OR DERIVED BY, TH E INDUSTRIAL UNDERTAKING CONCERNED. 89. THE REVENUE, IT HAS BEEN RIGHTLY CONTENDED BY M R.AGARWALLA, LEARNED SENIOR COUNSEL, HAS NOT EVEN ATTEMPTED TO DISTINGUISH THE DECISION, IN JAI BHAGW AN OIL & FLOUR MILLS CASE (SUPRA), IN ANY MANNER WHATSOEVER, WHEN THIS DECISION MAKES IT MORE THAN A BUNDANTLY CLEAR THAT TRANSPORT SUBSIDY GOES ON TO REDUCE THE COST OF PRODUCTION OF THE INDUSTRIAL UND ERTAKING LEADING TO EARNING OF PROFITS AND MAKING O F GAINS BY THE INDUSTRIAL UNDERTAKING. 94. PUT SHORTLY, THERE IS AN EXISTENCE OF DIRECT NE XUS BETWEEN TRANSPORT SUBSIDY, ON THE ONE HAND, AND THE MANUFACTURING/PRODUCTION ACTIVITIES OF INDUSTRI AL UNDERTAKING, ON THE OTHER, STANDS WELL ESTABLISH ED. UNLESS SHOWN OTHERWISE, THE INDUSTRIAL UNDERTAKINGS , IN THE PRESENT SET OF APPEALS, WHICH HAVE BEEN GRANTED TRANSPORT SUBSIDY, ARE ENTITLED TO CLAIM DE DUCTIONS IN TERMS OF THE DIRECTIONS OF THE LEARNED TRIBUNAL. 2. POWER SUBSIDY : 105. FROM A COMBINED READING OF THE TWO DECISIONS , RENDERED IN RAJARAM MAIZE PRODUCTS (SUPRA) AND EASTERN ELECTRO CHEMICAL INDUSTRIES CASE (SUPRA ), WHAT BECOMES TRANSPARENT IS THAT POWER SUBSIDY IS MEANT TO ENABLE A PERSON MEET A CERTAIN PERCENTA GE OF EXPENDITURE ON POWER AND IS, THEREFORE, REVENUE IN NATURE. HOWEVER, THOUGH REVENUE IN NATUR E, THE FACT REMAINS THAT IT HELPS IN NOT ONLY GROWT H OF THE INDUSTRIAL UNDERTAKING, BUT ALSO HELP AN IND USTRIAL UNDERTAKING TO EARN PROFITS AND MAKE GAINS. SUCH A SUBSIDY, THOUGH REVENUE IN NATURE AND TAXABL E ACCORDINGLY, IS NONETHELESS COVERED BY THE PROVISIONS EMBODIED IN SECTION 80IB OR 80IC, AS THE CASE MAY BE. 106. SITUATED THUS, THE PRINCIPLE, DEDUCIBLE FROM T HE CASES OF SAHNEY STEEL & PRESS WORKS LTDS . CASE (SUPRA), RAJARAM MAIZE PRODUCTS CASE (SUPRA) AND E ASTERN ELECTRO CHEMICAL INDUSTRIES CASE (SUPRA), IS THAT WHEN A SUBSIDY, GRANTED BY GOVERNMENT, IS O PERATIONAL IN NATURE, WHICH HELPS IN GENERATION OF PROFITS FOR ANY INDUSTRIAL UNDERTAKING, SUCH A PROF IT IS, INDEED, COVERED BY THE PROVISIONS EMBODIED I N SECTION 80IB OR 80IC, AS THE CASE MAY BE. 109. WE, NOW, TURN TO THE CASE OF PANCHARATNA CEMEN T (P) LTD. (SUPRA), WHEREIN AMITAVA ROY, J., (AS HIS LORDSHIP, THEN, WAS ), HAS, UPON CONSIDERATION OF THE SUBSIDY INVOLVED, TOOK THE VIEW THAT THE AMOUNT OF SUBSIDY, GIVEN BY WAY OF ASSISTANCE OR GR ANTS BY THE GOVERNMENT, SERVES AS STIMULUS TO THE WILLING INDUSTRIAL ESTABLISHMENTS TO CATER TO THE G ROWTH OF THE REGION AND, THUS, REINFORCE THE EVENTU AL INCOME OF THE BUSINESS OF THE UNDERTAKING. THOUGH T HE CASE OF PANCHARATNA CEMENT (P.) LTD. (SUPRA) IS, AS RIGHT POINTED OUT BY THE LEARNED ASG, AROSE OUT OF A WRIT PETITION AND NOT AN APPEAL UNDER THE ACT, THE FACT REMAINS THAT THE LAW, LAID DOWN THEREIN, I S RELEVANT IN DETERMINING THE CONTROVERSY, WHICH IS REQUIRED TO BE DEALT WITH IN THIS SET OF APPEALS. T HE RELEVANT OBSERVATIONS, APPEARING AT PARA 32, IN PANCHARATNA CEMENT (P.) LTD. (SUPRA), IS, THEREFORE , QUOTED BELOW : ..IT CANNOT BE GAINSAID THAT HAVING REGARD TO TH E LAYOUT OF INVESTMENT AND INCOME DESIGNED FOR ANY COMMERCIAL OR BUSINESS VENTURE, REIMBURSEME NT OF THE EXPENSES INCURRED TO WHATEVER EXTENT, WOULD LOGICALLY CONTRIBUTE TO THE PROFITS AND GAINS DERIVED FROM THE RELATED ENTERPRISE AND THUS WOULD AUGMENT THE OVERALL INCOME. THE AMOUNTS OF SU BSIDIES AS THE FACTS OF THE CASE REVEAL ARE BY WAY OF GOVERNMENT ASSISTANCE OR GRANTS UNDER THE SC HEMES TO PROVIDE STIMULUS TO THE WILLING INDUSTRIAL ESTABLISHMENTS TO CATER TO THE INDUSTRIA L GROWTH IN THE REGION AND, THEREFORE, THE SAME (SUBSIDY) ARE AIMED NECESSARILY AT NEUTRALIZING THE EXPENSES INCURRED AND THUS REINFORCE THE EVENTUAL INCOME OF THE BUSINESS UNDERTAKING. (EMPHASIS SUPP LIED) 110. WE RESPECTFULLY AGREE WITH THE ABOVE OBSERVATI ONS, MADE IN PANCHARATNA CEMENT (P)LTD. CASE (SUPRA), AND THE LAW LAID DOWN THEREIN. 4 ITA NO.1621/KOL/2016 DIGBOI CARBON (P) LTD., AYS- 2010-11 3.INTEREST SUBSIDY : 112. THE FACTS ARE, THEREFORE, NOT IN DISPUTE O N THIS ASPECT. THE DISPUTE IS : WHETHER THE INTERES T SUBSIDY IS PAYABLE ON NON-OPERATIONAL OR OPERATIONA L SUBSIDY? IF THE OBJECT OF THE RELEVANT SCHEME IS BORNE IN MIND, IT CLEARLY SHOWS THAT INTEREST SUBSI DY, HAVING AIMED AT REDUCING THE INTEREST PAYABLE O N WORKING CAPITAL BY AN INDUSTRIAL UNDERTAKING, HELPS DIRECTLY IN REDUCING THE COST OF MANUFACTURING OR PRODUCTION ACTIVITIES AND ESTABLISH THEREBY DIRECT AND FIRST DEGREE NEXUS BETWEEN THE INDUSTRIAL ACTIVITIES OF THE ASSESSEE-RESPONDENTS, ON THE ONE HAND, AND THE INTEREST SUBSIDY, ON THE OTHER, RECEI VED BY THE ASSESSEE-RESPONDENTS AND, IN CONSEQUENCE THE REOF, SINCE INTEREST SUBSIDY RESULTS INTO PROFITS A ND GAINS DERIVED FROM, OR DERIVED BY, AN INDUSTRIAL UN DERTAKING, THERE IS NO REASON AS TO WHY SUCH PROFIT S AND GAINS, EARNED BY AN INDUSTRIAL UNDERTAKING ON T HE STRENGTH OF SUCH A SUBSIDY, NAMELY, INTEREST SUBSIDY, BE NOT ALLOWED TO BE DEDUCTED FROM THE TAX ABLE INCOME OF THE INDUSTRIAL UNDERTAKING CONCERNED. 8. THE HONBLE GAUHATI HIGH COURT HAD DISTINGUISHED THE DECISION OF THE HONBLE APEX COURT IN LIBERTY INDIA CASE AS FOLLOWS:- 124. LOGICALLY EXTENDED, THIS WOULD MEAN THAT THE RE WAS NO RELATIONSHIP OR NEXUS BETWEEN THE EXPORT INCENTIVE, ON THE ONE HAND, AND MANUFACTURING/PRODU CTION, ON THE OTHER. DEPB ENTITLEMENT WAS BASED ON THE ARTIFICE OF DEEMED IMPORT CONTENT OF EXPORT PRODUCT AND WAS NOT EVEN BASED ON ACTUAL IMPORT CONTENT OF THE EXPORT PRODUCT; WHEREAS, IN THE CASE S AT HAND, THE TRANSPORT SUBSIDY WAS MADE AVAILABLE ON THE RAW MATERIAL ACTUALLY CONSUMED IN THE MANUFA CTURING PROCESS AND FINISHED GOODS, WHICH WERE ACTUALLY PRODUCED AND TAKEN TO THE EXISTING MARKET FOR SALE AND, SIMILARLY, POWER SUBSIDY, INTEREST SUBSIDY, AND INSURANCE SUBSIDY ARE, AS ALREADY INDI CATED ABOVE, MADE AVAILABLE ON THE ACTUAL AMOUNT OF THE POWER BILL, INTEREST AND INSURANCE PREMIUM P AID BY THE ASSESSEE-RESPONDENTS CONCERNED THE INFERENCE, SO DRAWN, GETS REINFORCED FROM THE FACT THAT DEPB ENTITLEMENT WAS FREELY TRANSFERABLE AND SALEABLE RESULTING IN PROFIT OR LOSS. 125. THAT THE CASE OF LIBERTY INDIA CASE (SUPRA) I S NOT APPLICABLE TO THE CASES AT HAND IS ALSO EVIDE NT FROM THE FACT THAT THE OBJECT BEHIND DEPB WAS TO NE UTRALIZE THE INCIDENCE OF CUSTOMS DUTY PAYMENT ON THE IMPORT DUTY OF THE EXPORT PRODUCT AND, HENCE, T HE DEPB SCHEME WAS NOT AIMED AT NEUTRALIZING THE COST OF PRODUCTION; RATHER, AS OBSERVED BY THE SUPR EME COURT, IT WAS AN INCENTIVE FOR EXPORT AND ENTITLEMENT AROSE, WHEN EXPORT WAS MADE AND NOT OTH ERWISE. 127. MOST IMPORTANTLY, POINTED OUT THE SUPREME COU RT, IN LIBERTY INDIA CASE (SUPRA), THAT THE RULES D O NOT ENVISAGE A REFUND OF AN AMOUNT ARITHMETICALLY EQUAL TO EXEMPTION DUTY OR CENTRAL EXCISE DUTY ACTUALLY PAID BY AN INDIVIDUAL IMPORTER/MANUFACTURE R. THIS IS THE STRIKING DIFFERENCE BETWEEN SUBSIDIE S ON TRANSPORTATION COST, POWER, INTEREST AND INSURAN CE, IN THE CASES AT HAND, ON THE ONE HAND, AND DUTY DRAWBACK SCHEME, ON THE OTHER, INASMUCH AS THE SUBS IDIES, SO PROVIDED TO THE ASSESSES CONCERNED, ARE ARITHMETICALLY EQUIVALENT TO THE COST OF RAW MATERI ALS ACTUALLY USED IN THE MANUFACTURING PROCESS AND THE FINISHED GOODS, WHICH IS ACTUALLY TAKEN TO THE EXISTING MARKET FOR SALE WITHIN AND OUTSIDE THE NOR TH- EASTERN REGION AND, SIMILARLY, THE ASSESSEES CONCER NED HAVE THE RIGHT TO RECEIVE POWER SUBSIDY, ARISIN G OUT OF POWER BILLS PAID, OR INTEREST SUBSIDY OR INS URANCE SUBSIDY, EQUIVALENT TO THE AMOUNT PAID ON INTEREST AND INSURANCE RESPECTIVELY. THESE ASPECTS OF DEPB AND DUTY DRAWBACK SCHEME GIVE RISE TO THE INFERENCE THAT THE DECISION, IN LIBERTY INDIA ( SUPRA), WAS RENDERED, IN THE LIGHT OF ITS OWN FACTS , AND NOT FOR UNIVERSAL APPLICATION. THIS INFERENCE GETS STRENGTHENED FROM THE FOLLOWING OBSERVATIONS MADE I N LIBERTY INDIA CASE (SUPRA) : THE NEXT QUESTION IS WHAT IS DUTY DRAWBACK? SEC TION 75 OF THE CUSTOMS ACT, 1962 AND SECTION 37 OF THE CENTRAL EXCISE ACT, 1944 EMPOWER GOVERNMENT OF INDIA TO PROVIDE FOR REPAYMENT OF CUSTOMS AND EXCISE DUTY PAID BY AN ASS ESSEE. THE REFUND IS OF THE AVERAGE AMOUNT OF DUTY PAID ON MATERIALS OF ANY PARTICULAR CLASS OR DESCRIPTION OF GOODS USED IN THE MANUFACTURE OF EXPORT GOODS OF SPECIFIED CLASS. THE RULES DO NOT ENVISAGE A REFUND OF AN AMOUNT ARITHMETICALLY EQUAL TO CUSTOMS DUTY OR CENT RAL EXCISE DUTY ACTUALLY PAID BY AN INDIVIDUAL IMPORTER-CUM-MANUFACTURER. SUB-SECTION ( 2) OF SECTION 75 OF THE CUSTOMS ACT REQUIRES THE AMOUNT OF DRAWBACK TO BE DETERMINED ON A CONSIDERATION OF ALL THE 5 ITA NO.1621/KOL/2016 DIGBOI CARBON (P) LTD., AYS- 2010-11 CIRCUMSTANCES PREVALENT IN A PARTICULAR TRADE AND A LSO BASED ON THE FACTS SITUATION RELEVANT IN RESPECT OF EACH OF VARIOUS CLASSES OF GOODS IMPO RTED. BASICALLY, THE SOURCE OF DUTY DRAWBACK RECEIPT LIES IN SECTION 75 OF THE CUSTOMS ACT AND SECTION 37 OF THE CENTRAL EXCISE ACT (EMPHASIS SUPPLIED) 128. IN SHORT, THUS, THE DEPB AND DUTY DRAWBACK SCH EME WERE NOT, AS ALREADY INDICATED ABOVE, RELATED TO THE BUSINESS OF INDUSTRIAL UNDERTAKING P ER SE FOR ITS MANUFACTURING OR PRODUCTION. ENTITLEMENT FOR DEPB OR DUTY DRAWBACK SCHEME AROSE, WHEN THE UNDERTAKING DECIDED TO EXPORT AFTER MANUFACTURING OR PRODUCTION AND THIS INCENTIVE WAS RESTRICTED ONLY TO THE EXPORT OF GOODS OF A SPECIFI ED CLASS. CONSEQUENTLY, IF THERE WAS NO EXPORT, THERE WAS NO INCENTIVE FROM DEPB OR DUTY DRAWBACK. THIS APART, DEPB OR DUTY DRAWBACK SCHEME DID NOT PR OVIDE REFUND OF EXEMPTION FROM CENTRAL EXCISE DUTY ACTUALLY PAID. 129. THUS, THE RELATIONSHIP UNDER THE DEPB OR DUTY DRAWBACK SCHEME, ON THE ONE HAND, AND THE MANUFACTURING OR PRODUCTION, ON THE OTHER , WAS NOT PROXIMATE AND DIRECT. THE ENTITLEMENT WAS BASED ON THE ARTIFICE OF AVERAGE AMOUNT OF DUTY PAID. IN THE CASE OF TRANSPORT SUBSIDY, POWER SUBSIDY AND INSURANCE SUBSIDY, THE RELATION BETWEEN SUBSIDY REC EIVED, ON THE ONE HAND, AND THE PROFITS EARNED OR THE GAINS MADE, BY AN INDUSTRIAL UNDERTAKING, STAND , AS ALREADY OBSERVED AT PARAGRAPH 127, WELL ESTABLISHED. 131. LIBERTY INDIA CASE (SUPRA), IT MAY BE NOTED, I S, THUS, AN EXPOSITION OF LAW ON THE SCHEMES OF DEP B AND DUTY DRAWBACK SCHEME, WHICH RELATE TO EXPORT OF GOODS BY AN INDUSTRIAL UNDERTAKING; WHEREAS THE SCHEME OF TRANSPORT SUBSIDY, INTEREST SUBSIDY, POWE R SUBSIDY AND INSURANCE SUBSIDY, IS INEXTRICABLY AN D DIRECTLY CONNECTED WITH THE REDUCTION OF COST OF PR ODUCTION AND MANUFACTURING OF AN INDUSTRIAL UNDERTAKING ENTITLING THEREBY THE ELIGIBLE INDUSTRI AL UNDERTAKINGS TO CLAIM DEDUCTION UNDER SECTION 80IB OR 80IC, AS THE CASE MAY BE. 132. THE DECISION, IN LIBERTY INDIA CASE (SUPRA), I S, THEREFORE, NOT, IN OUR CONSIDERED VIEW, RELEVANT TO THE SCHEMES OF SUBSIDIES AT HAND. 9. THE HONBLE SUPREME COURT HAS ALSO CONFIRMED THE AFORESAID VIEW OF THE HONBLE GAUHATI HIGH COURT. IN VIEW OF THE DECISION OF THE HONBLE SUPRE ME COURT ON IDENTICAL ISSUE ON THE VERY SAME SUBSID Y AND TAKING INTO CONSIDERATION ALL THE ABOVE ASPECTS, WE ARE OF THE VIEW THAT THE ORDERS OF CIT(A) WHICH IS IN CONFORMITY WITH THE DECISION OF THE HONBLE SUPREME COURT AND CBDT CIRCULAR REFERRED TO ABOVE, DOES NO T CALL FOR ANY INTERFERENCE. WE THEREFORE DO NOT FIN D ANY MERIT IN THE APPEAL BY THE REVENUE. ACCORDING LY THE APPEAL OF THE REVENUE IS DISMISSED. SINCE THE ISSUE RAISED ARE SQUARELY COVERED IN FAVO UR OF THE ASSESSEE BY THE AFORESAID DECISION OF TRIBUNAL, AND SINCE THE ORDER OF LD. CI T(A) IS BY RELYING ON THE THE APEX COURT DECISION, DOES NOT CALL FOR INTERFERENCE FROM OUR PART, WE, THEREFORE, DO NOT FIND ANY MERIT IN THE APPEAL FILED BY THE REVENUE. ACCORDINGLY, THE APPEAL OF REVENUE IS DISMISSED. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 02.02.201 8 SD/- SD/- (DR.A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2ND FEBRUARY, 2018 JD.(SR.P.S.) 6 ITA NO.1621/KOL/2016 DIGBOI CARBON (P) LTD., AYS- 2010-11 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT DCIT, CIRCLE-3(1), KOLKATA. 2 RESPONDENT M/S. DIGBOI CARBON (P) LTD., 37A, BE NTINCK STREET, ROOM NO. 301, KOLKATA-700 069. 3. THE CIT(A) KOLKATA. 4. 5. CIT KOLKATA DR, ITAT, KOLKATA. / TRUE COPY, BY ORDER, SR. PVT. SECRETARY