AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 400
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.... charges etc. in the Treasury against Form TR-7 in cash for getting supplies from the wholesale Licensee. Subsequently, the Excise Department by a notification dated 29.08.2005 changed the procedure. As per the revised procedure prescribed by the Excise Department, for lifting Country Spirit, the assessee, who is a retail vendor, was required to make the entire payment consisting of cost of the stock-in-trade, Excise duty and bottling charges etc. only to the wholesale Licensee appointed by the State Government. Following the revised procedure, the Assessee made payments by cash deposits in the Bank A/c of its Supplier i.e. M/s. Asansol Bottling and Packaging Co. Pvt. Ltd. maintained in the State Bank of India. While completing the assessments of the assessee, the Ld. A.O. disallowed the cash payments (in excess of Rs. 20,000 on each occasion) made in the Bank A/c of the Supplier maintained in the State Bank of India in terms of Sec.40A(3) of the I. T. Act in the sum of Rs. 29,73,086/-. Apart from this, the ld AO observed that the assessee had made cash payments in violation of provisions of section 40A(3) of the Act to M/s United Spirits Ltd for purchase of beers to the tune of Rs....
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....m of Rs. 3,48,392/- made to M/s United Spirits Ltd, he fairly conceded that the same is in violation of section 40A93) of the Act and accordingly disallowance thereon deserves to be confirmed. In response to this,the ld DR placed reliance on the orders of the lower authorities. 6. We have heard the rival submissions and perused the materials available on record. We have also gone through the provisions of The West Bengal Excise Rules 2005 and The Bengal Excise Act, 1909. The facts stated hereinabove remain undisputed and hence the same are not reiterated for the sake of brevity. At the outset, we deem it necessary to incorporate the following clauses from the Notification issued by the Excise Department, Government of West Bengal , dated 29.8.2005 for the sake of better understanding of the facts :- "In exercise of the power conferred by section 85 and section 86 of the Bengal Excise Act, 1909 (Ben. Act V of 1909) and in supersession of the rules published with this Department Notification No. 122-EX/O/1R-1/2000 dated 23.2.2000, as subsequently amended, the Governor is pleased hereby to make the following rules regulating the issue and removal of country spirit on payment of duty....
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....f country spirit to the retail vendors or transport on payment of duty from the concerned country spirit bottling plant or warehouse. 5. Minimum balance in Personal Ledger Account.-The Collector shall issue directions for maintaining the minimum amount "of balance in the aforesaid Personal Ledger Accounts in order to ensure that duty for daily issues of country spirit from the country spirit bottling plant or warehouse may be debited from the said account, leaving sufficient balance as may be determined by him. 6. Procedure of issue of country spirit.-(1) The retail vendor or his authorized representative shall submit to the representative of the wholesale licensee, through Excise Officer-in-Charge of the warehouse, a demand for issue of country spirit in Form I appended to these rules in duplicate. The duplicate copy shall be kept in the custody of the Excise Officer-in-Charge for his official record. (2) No retail vendor of country spirit shall deposit duty direct into the local treasury for issue of country spirit to be taken by him from the warehouse concerned. Duty, cost price, bottling charge, if there be any, at the prescribed rate and other imposition, as may be presc....
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.... on the decision of Co-ordinate Bench of Bangalore Tribunal in the case of Sri Renukeswara Rice Mills vs ITO reported in 93 ITD 263 (Bang Trib.) is well founded , wherein, it was held that the cash payment in the bank account of the payee is sufficient to get exemption in terms of Rule 6DD in as much it is ensured that the payee and payee alone receives the payment and the origin and conclusion of the transaction is traceable thereby fulfilling the criterion for ensuring the object of introduction of section 40A(3) of the Act. 8. We find that the payments were made to the M/s Asansol Bottling & Packaging Co. Pvt. Ltd (wholesale licensee) by directly depositing the cash in their bank account. Moreover, the regulations of the West Bengal Government pursuant to notification from its Excise Department dated 29.8.2005 also mandates the payment to be made by way of direct deposit into the bank account of the wholesale licensee. This fact is also not disputed by the revenue. 9. We find that this tribunal had in the case relied upon by the ld AR supra had elaborately dealt with the impugned issue with specific reference to the West Bengal Excise Rules and Bengal Excise Act, case laws on ....
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....ge - (a) of manufacturing, or supplying by wholesale, or (b) of manufacturing, and supplying by wholesale, or (c) of selling, by wholesale or retail, or (d) of manufacturing or supplying by wholesale and selling retail, or (e) of manufacturing and supplying by wholesale and selling retail, any country liquor or intoxicating drug within any specified local area: Provided that public notice shall be given to the intention to grant any such exclusive privilege, and that any objections made by any person residing within the area affected shall be considered before an exclusive privilege is granted. (2) No grantee of any privilege under sub-section (1) shall exercise the same unless or until he has received a license in that behalf from the Collector or the Excise Commissioner. Hence it could be safely concluded that M/s Asansol Bottling & Packaging Co. Pvt Ltd (Bottling Plant) is a warehouse within the meaning of Rule 2(vii) of the Excise Rules 2005 and said warehouse is a State Government establishment, established and controlled by the Excise Commissioner . It would be relevant to reproduce Rule 6DD(b) of the IT Rules at this juncture :- (b) where the paymen....