2011 (4) TMI 649

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....llate Tribunal, Chandigarh Bench "A", Chandigarh (hereinafter referred to as "the Tribunal"), passed in ITA No. 608/Chandi/2002 dated 28.6.2005 for the assessment year 1994-95, raising following substantial question of law:-   "Whether on the fact, law and in the circumstances of the case, the Hon'ble Income Tax Appellate Tribunal was legally justified in holding that the withdrawal of deduction u/s 80-I with reference to the receipts on account of duty draw back was beyond the scope of the A.O. u/s 154 in view of the law laid down by the Hon'ble Supreme Court in the case of CIT Vs. Sterling Foods Ltd., 237 ITR 379 and Pandian Chemicals Ltd. v. CIT 262 ITR 278?"   3. The assessee claimed deduction under Section 80-I of the A....

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....TO v. Volkar Brothers, 82 ITR 50 (SC) and CIT v. Hero Cycles Pvt. Ltd. 228 ITR 463 (SC)]. Taking the totality of facts and circumstances of this case into consideration, we are of the considered view that withdrawal of deduction u/s 80I with reference to the receipts on account of duty drawback is beyond the scope of the AO u/s 154. We accordingly uphold the order of the CIT(A) and dismiss the appeals of revenue."   4. We have heard learned counsel for the revenue. None appears for the assessee in spite of service.   5. Learned counsel for the revenue submits that merely because the words duty draw back were not referred to in the judgment of the Hon'ble Supreme Court in Sterling Foods Ltd's case (supra), did not affect the ....

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....the incidence of customs duty payment on the import content of export product. This neutralization is provided for by credit to customs duty against export product. Under DEPB, an exporter may apply for credit as percentage of FOB value of exports made in freely convertible currency. Credit is available only against the export product and at rates specified by DGFT for import of raw materials, components etc. DEPB credit under the Scheme has to be calculated by taking into account the deemed import content of the export product as per basic customs duty and special additional duty payable on such deemed imports. Therefore, in our view, DEPB/duty drawback are incentives which flow from the Schemes framed by Central Government or from s. 75 o....