TaxTMI 
TaxTMI 
2011 (7) TMI 1082
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....ibunal insofar as it refuses benefit of section 4A in respect of the investment made towards dyes and moulds only. Therefore, facts recorded hereunder are with reference to the relief as has been pressed before this court. The revisionist before this court is a company incorporated under the Companies Act. It has set up a manufacturing unit at plot No. 59, Birthyan-Mandhana, Kanpur Dehat. The unit is engaged in manufacture of plastic ware and thermo ware. The company claiming to be a new unit, made an application for grant of exemption in terms of section 4A read with the notification published on July 27, 1991 for the period April 1, 1990 to March 31, 1995. For the purposes of claiming the said exemption, the assessee disclosed a total investment of Rs. 1,01,32,466.82 in plant and machinery. As against this amount of investment and fixed asset claimed by the revisionist, a sum of Rs. 16,74,368 said to be the price of dyes and moulds has been excluded therefrom under the impugned order. The Divisional Level Committee under its order dated September 22, 2000, refused to provide the benefit of the investment qua the said sum of Rs. 16,74,368 as the same has been made towards mo....
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....oduced to Explanation 4 to section 4A vide Amendment Act, 1995. He clarifies that the investment made towards "dyes and moulds", in the facts of the case were essential and integral part of plant and machinery used for manufacture of the goods in terms of the notification dated July 27, 1991, same would be a fixed capital asset, the value whereof had to be added for the purposes of section 4A. Mere adding of the words "dyes, moulds, zigs and fixtures" by the said Amendment Act, 1995 will not have the effect of denying to the revisionist the benefit of investment so made. For the proposition so raised, reliance has been placed upon the judgment of the apex court in the cases of Pappu Sweets and Biscuits v. Commissioner of Trade Tax, U. P., Lucknow reported in [1998] 111 STC 425 (SC) ; [1998] UPTC 1086, Scientific Engineering House (P) Ltd. v. Commissioner of Income-tax, Andhra Pradesh reported in [1986] 157 ITR 86 (SC) ; [1986] 1 SCC 11 and lastly upon the single Judge judgment of the Rajasthan High Court in the case of Commissioner, Commercial Taxes Department v. R. B. Garg and Brothers reported in [2002] 128 STC 508 (Raj). The counsel for the Department in reply submits that....
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....elevant for our purposes reads as follows:- "for the words 'plants, machinery, equipment, apparatus and components', wherever occurring, the words 'plants, machinery, equipment, apparatus, components, moulds, dyes, jigs and fixtures' shall be substituted." From the aforesaid, it cannot be disputed that up to the date of enforcement of U. P. Act No. 31 of 1995 the words "dyes, moulds, zigs and fixtures" did not form part of Explanation 4 to section 4A and similarly did not form part of the notification dated July 27, 1991. Further such amendment has been introduced on a date which is subsequent to the relevant date in the facts of the present case and that the amendments are prospective in nature. The issue to be examined by this court as has been canvassed by the counsel for the revisionist is whether the moulds and dyes qua which investment has been made by the revisionist and is claimed as capital fixed asset, answer the description of plant and machinery or not with reference to the language of section 4A read with Explanation 4 and the notification dated July 28, 1991 as it then stood or not. The apex court in the case of Pappu Sweets and Biscuits repor....
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.... integral and essential part of plant and machinery used for manufacture of the goods and may, therefore, be said to be not included therein. At the same time in manufacturing unit like that of the revisionist, dyes and moulds are integral part of plant and machinery as no manufacturing activity can be carried on unless the dyes and moulds are provided for. He submits that in such case the investment made towards dyes and moulds would be an investment covered b'y the definition of plant and machinery as per section 4A, Explanation 4 read with notification dated July 27, 1991. Therefore, the subsequent amendment by Act of 1995 is not of much consequence for examining the entitlement of the revisionist for computing the fixed capital assets in terms of the provisions applicable on the relevant date. The Divisional Level Committee and the Tribunal have refused the benefit of investment so made towards dyes and moulds only because of introduction of the words "dyes and moulds" by a subsequent amendment in section 4A which under the order impugned has been held to be a conclusive proof of the fact that investment towards dyes and moulds will not be taken into account for the purp....