TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 317
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....ee was unable to produce the foreign inward remittance certificate for the money received by it on the exports. Assessee stated that it was registered as an EOU by the competent authority in Cochin. As per the assessee, competent authority of the EOUs, namely, ACIT, Customs, had authorised it to receive the sale consideration in Indian currency from TTIPL. Along with the above reply assessee also produced a copy of FIRC form obtained by TTIPL for justifying its claim. Contention of the assessee was that TTIPL had received the foreign currency only as an agent of the assessee. Said party had also given a letter stating that no benefit or deduction was being claimed by it for the export consideration received for exports made by the assessee. Assessee also relied on Policy Circular No.19 (RE-2006) 2004-09, dt.11.09.2006, for claiming that exports effected through third party and foreign exchange realised in the name of third party, if the goods were manufactured in an EOU were eligible for all the export benefits. 03. However the AO was not happy with the explanation given by the assessee. According to him, assessee had not received the export consideration in convertible foreign cu....
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....per the Ld. AR, based on the judgment of Hon'ble jurisdictional High Court in the case of Tata Elxsi Ltd (supra), assessee would be eligible for deduction u/s.10B of the Act. According to him it is clear from the FIRC certificate issued from TTIPL placed at paper book page 3 to 19 that whole of the export proceeds were received by them in foreign currency. As per the Ld. AR such amount was transferred by TTIPL to the assessee in Indian currency. TTIPL had also issued a disclaimer certificate placed at paper book page 1, which clearly mentioned that assessee was a supporting manufacturer. 06. Per contra, Ld. DR strongly supported the orders of authorities below. 07. We have perused the material on record and heard the rival contentions. It is true that in assessee's own case for earlier years, namely 2008-09 and 2009-10, issue regarding whether assessee was eligible for claim of deduction u/s.10B of the Act, when export proceeds were not received by it in foreign currency had come up and this Tribunal in its order dt.11.04.2014 had held as under : 15. It is clear from the above submissions as well as the invoices that the Assessee was manufacturer and Toyota Tsusho India Pvt. Lt....
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....ia Ltd., which was also a registered STP. This transaction, assessee had claimed, as export for the purposes of s. 10A. This was not accepted by the AO and subsequently confirmed by the learned CIT(A). Before Tribunal the Assessee submitted that sale to M/S.Texas Instruments India Ltd., should also be treated as deemed export. M/s Texas Instruments India Ltd., is a registered STP unit and sale to such company should be regarded as exports for the purpose of s. 10A. As the sale by assessee to M/s Texas Instruments India Ltd., is regarded as an export sale under Exim Policy, the same meaning should be attached to understand the term 'export turnover' for the purpose of s. 10A also. The Assessee also relied on clarification given by the Ministry of Commerce & Industry, Department of Commerce, by which it was clarified that sales by one STP to another STP within India is a deemed export. The tribunal however rejected the claim made by the Assessee observing as follows: "14. We have heard rival submissions and perused the records. Chapter 8 of the Exim Policy issued by the Ministry of Commerce & Industry defines 'deemed export' as under : "8.1 'Deemed Exports' refers to those tran....
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....ls." 18. The aforesaid decision of the Tribunal is clearly an answer to the arguments put forth by the learned counsel for the Assessee before us. We are therefore of the view that the CIT(A) was justified in upholding the order of the AO refusing to allow deduction u/s.10B of the Act to the Assessee. We uphold the orders of CIT(A) and dismiss the appeals by the Assessee. 08. Finding of the Tribunal that assessee was a manufacturer and TTIPL was the buyer and TTIPL, Europe, S. A, Belgium was the consignee. Thus TTIPL was a third party exporter. After going through the provisions of Section 10B and Section 80HHC of the Act, this Tribunal held that Section 10B did not give any leeway for a liberal interpretation suggested by the assessee for giving benefits under that section to a supporting manufacturer. No doubt substantial reliance was placed by the Tribunal on the decision of a coordinate bench in the case of Tata Elxsi Ltd (supra). In Tata Elxsi's case also it was held by the Tribunal that the benefit u/s.10A of the Act could not be given to a supporting manufacturer. Decision of coordinate bench in the case of Tata Elxsi Ltd (supra), was assailed by the assessee concerned ....
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.... derived by the Undertaking from the export. 21. Clause 6.11 of Exim Policy dealing with entitlement for supplies from the DTA states that supplies from the DTA to EOU/EHTP/STP/BTP units will be regarded as 'deemed export', besides being eligible for relevant entitlements under paragraph 6.12 of the Policy. They will also be eligible for the additional entitlements mentioned therein. What is of importance is when a supply is made from DTA to STP, i t does not satisfy the requirements of export as defined under the Customs Act. However, for the purpose of Exim Policy, it is treated as 'deemed export'. Therefore, when Section 10A of the Act was introduced to give effect to the Exim Policy, the supplies made from one STP to another STP has to be treated as 'deemed export' because Clause 6.19 specifically provides for export through Status Holder. It provides that an EOU/EHTP/STP/BTP unit may export goods manufactured /software developed by it through other exporter or Status holder recognized under this pol icy or any other EOU/EHTP/STP/SEZ/BTP unit. What follows from this provision is that to be eligible for exemption from payment of income tax, export shou....