TaxTMI 
TaxTMI 
2016 (2) TMI 707
X X X X Extracts X X X X
X X X X Extracts X X X X
....ring gold jewellery. The assessee obtained approval in the MEPZ Special Economic Zone for manufacturing gold bangles and gold pendants. The assessee claimed deduction under Section 10AA of the Act on the basis of the approval granted by MEPZ Special Economic Zone. However, the Assessing Officer rejected the claim of exemption under Section 10AA of the Act on the ground that the assessee delayed the commencement of production at Special Economic Zone. The Assessing Officer has also found that the assessee has not manufactured the item of jewellery authorized by the MEPZ Special Economic Zone. Adverting to the first ground of rejection by the Assessing Officer, namely, commencement of production at Special Economic Zone, the Ld. representative submitted that the assessee-firm was manufacturing gold pendants/medallions for export. In fact, the Special Economic Zone by an order dated 10.06.2008, approved the assessee for manufacturing of gold bangles and gold pendants/ medallions. The assessee commenced the trial production of gold pendants/medallions in April, 2009, within one year from the date of grant of approval. The assessee has also purchased 82.5 KVA Genset in October, 2008. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... granite slabs would amount to manufacture or production of an article or thing and hence it is eligible for exemption. Referring to the definition in Special Economic Zone Act, 2005, the Ld. representative submitted that 'manufacture' means to make, produce, fabricate, assemble, process or bring into existence, by hand or by machine, a new product having a distinctive name, character or use and shall include process such as refrigeration, cutting, polishing, blending etc. Since the gold bar imported by the assessee undergoes a series of process before it reaches the final stage as gold medallion/ gold pendant, according to the Ld. representative, the end product manufactured by the assessee, namely, gold medallion / gold pendant has to be treated as a new article. Referring to the assessment order, the Ld. representative submitted that the assessee manufactured gold medallions. Special Economic Zone authorizes the assessee to manufacture only gold bangles and gold pendants. In violation of approval granted by Special Economic Zone, according to the Ld. representative, the Assessing Officer found that the assessee has manufactured gold medallions. According to the Ld. representativ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... other part of the globe. Therefore, the assessee is entitled for deduction under Section 10AA of the Act. 5. On the contrary, Sh. Pathlavath Peerya, the Ld. Departmental Representative, submitted that there was a survey in the premises of the assessee under Section 133A of the Act on 24.02.2014. During the course of survey operation, the Revenue authorities found that the assessee has not manufactured gold bangles and pendants. MEPZ Special Economic Zone granted approval only for manufacturing gold bangles and pendants. The other condition imposed by Special Economic Zone is that the assessee has to commence the production before 10.06.2009. The assessee purchased the raw material only on 03.09.2009, therefore, the assessee could not have commenced production within six months period allowed by the Special Economic Zone while granting approval. Therefore, according to the Ld. D.R., the assessee has not commenced the production within the time limit of six months stipulated by Special Economic Zone 6. Now coming the export of finished goods, the Ld. D.R. pointed out that the assessee was authorized by Special Economic Zone to manufacture gold bangles and pendants. The assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ufacture or produce such articles or things or provide services, as the case may be. It also provides for further 50% of such profits and gains for further five assessment years thereafter. The first condition is that the assessee shall be an entrepreneur within the meaning of Section 2(j) of Special Economic Zone Act, 2005. We have carefully gone through the provisions of Special Economic Zone Act, 2005, more particularly, Section 2(j) which reads as follows:- "2(j) "entrepreneur" means a person who has been granted a letter of approval by the Development Commissioner under sub-section (9) of section 15." Therefore, "entrepreneur" means a person who has been granted a letter of approval by the Development Commissioner under Section 15(9) of the Special Economic Zone Act, 2005. In this case, the assessee was admittedly granted approval under Section 15(9) of the Special Economic Zone Act, 2005. The approval granted by the Development Commissioner under Special Economic Zone Act, 2005 was not cancelled so far and it continues. Therefore, the assessee is an entrepreneur under Section 2(j) of the Special Economic Zone Act, 2005. 8. Now coming to the product manufactured....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lion, it does not mean that what was manufactured by the assessee is only medallion. The product manufactured by the assessee even though called as "medallion", it is pendant in the Indian context. It is an ornament worn by hanging in the chain or necklace. It is common knowledge that the award / medal conferred on special and ceremonial occasions would be normally known as "medallions". It does not mean that the medallions could not be worn as ornament/jewellery in the normal course. In our opinion, the pendant and medallion can be used as ornament/jewellery along with chain and necklace. At the best, one may say that pendant and medallion are nothing but a designery jewellery to be worn along with chain or necklace. By taking into consideration of the utility of the medallions, this Tribunal is of the considered opinion that medallion is also a pendant. Therefore, merely because the product manufactured by the assessee was described as medallion, it cannot be said that there was any violation of approval granted by the Development Commissioner, Special Economic Zone. Irrespective of nomenclature used by the assessee or the Special Economic Zone, this Tribunal is of the considered....