TaxTMI 
TaxTMI 
2017 (4) TMI 1056
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....t for benefit under section 10(23G) and 80-IA of the Act. The assessee has obtained the said certificate from the port of Visakhapatnam and was got approval from the Ministry of Commerce & Industry and that the assessee has classified as Container Freight Station by the Commissioner of Customs and submitted that inland port falls within the definition of 'Infrastructure Facility' under section 80IA-(4) and eligible for deduction. However, Assessing Officer after considering the explanation, denied the claim of the assessee by observing that ICD & CSF are not infrastructure facilities and not eligible for deduction under section 80-IA(4). An important criteria for claim under section 80-IA(4) of the Act is 'the Indian Company should enter into an agreement with Central or State Government or a Government undertaking etc. for operating the said facility, subject to the condition that such facility should be transferred to the said Government undertaking within the period stipulated in the agreement'. There is no agreement between the assessee company and the government or body, etc. as enjoined in section 80-IA of the Act for development of the said structure. 3. On being aggrieve....
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....but a warehouse. Distinction between ICT & CFS : "Inland Container Depot is a place that acts as a "self contained customs stations" like a port or air cargo unit where - Filling of customs manifests. Bills of entry Shipping bills and other declarations, assessment and all the activities related to clearance of goods for home use. Warehousing Temporary admissions Re-export, temporary storage for onward transit and outright export. Transshipment etc., takes place" Container Freight Stations are specified as customs area under Cause (b) of the said Section 8 wherein imported goods or export goods are ordinarily kept before clearance by the customs An ICD is a self contained customs station like a port or air cargo unit where filing of Customs manifests, Bills of Entrys, Shipping Bills and other declarations, assessment and all the activities related to clearance of goods for home use, warehousing, temporary admissions, re-export temporary storage for onward transit and outright export, transshipment, etc., take place. An ICD would have its own automated system with a separate station code (such as INTO 6....
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....and examination of goods. A customs clearance facility could be established as a CFS at a port city for examination of imported / export goods, since the CFS would fall under the jurisdiction of Commissioner of Customs, having jurisdiction over the Customs port with which the CFS would be attached. Further, in a port city such as Chennai or Mumbai, it may be possible to develop an ICD within the territorial jurisdiction of the concerned Customs Commissonerate in addition to existing CFSs. Such an ICD should be capable of providing full-fledged Customs services, independent EDT system, and all procedures meant for transshipment of cargo have to be followed for movement of goods from the port of import to the ICD. Further, such an ICD would function as an independent Customs Station in all respects and would not be attached to any other port or airport. Thus, in respect of proposals it has to be examined whe4ther the proposed facility is required to be approved as an ICD or CFS. Movement of goods from a port I airport / LCS to an iCD is in the nature of movement from one Customs station to another, governed by Goods Imported (Condition of Transshipment) Regulations, 1995, On....
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....oposal for setting up of an Container Freight Station at Haldia for handling import and export cargo. The approval is subject to the following terms and conditions:- a) The Letter of Intent holder shall take adequate steps to create proper /infrastructure keeping in view the indicative norms -given in Pairs A & B of the Guidelines for setting up Inland container Depots/ Container Freight Stations (ICDS/CF5) within a period of one year from the date of issue of this letter. b) Necessary bond and guarantees, as required, would be executed with the concerned Commissioner of Customs and Central Excise. c) The approval would be subject to cancellation in the event of violation of the Customs and other laws of the land and Rules. d) A quarterly progress report of the implementation shall be sent to the Ministry of Commerce. e) The working of the CFS will be open to review by the Inter Ministerial Committee. f) Formalities in respect of acquisition / possession of the land shall be completed within 60 days and intimated to the M/o Commerce, failing which the approval granted would be automatically cancelled. 2. The facility to....
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....re is no agreement and hence the assessee is not eligible for exemption is not the correct position of law. The Hon'ble Delhi High Court in the case of Container Corporation Ltd. (supra) held as follows: "The term "infrastructure facility" was defined in section 80- IA(12)(ca) of the Income Tax Act, 1961, to mean a road, highway, bridge, airport, port or rail system or any other public facility of a similar nature as may be notified by the Central Board of Direct Taxes. The Finance (No. 2), 1998, included the words "Inland water ways and inland ports" in the definition of "infrastructure facility" in sub-section (12), clause (ca), with effect from April 1, 1999. When the entire section was recast and even after several amendments were thereafter made to the section, inland ports continued to enjoy the dededuction as infrastructure facility. There is no definition of the words "inland ports" in any of the dictionaries. But the words "inland container depot" "were introduced in sec. 2(12) of the Customs Act, 1962, which defines "customs port". This was by way of an amendment made by the Finance Act, 1983, with effect from May 13, 1983. Simultaneously, clause (aa) wa....
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....y High Court in the case of CIT-II vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. reported in [2015] 59 taxmann.com 78 (Bombay) and also the decision of Hon'ble Madras High Court in the case of CIT vs. A.L. Logistics (P) Ltd. reported in [2015] 55 taxmann.com 283 (Madras). 6. On the other hand, Departmental Representative strongly supported the order of the ld. CIT(A). 7. We have heard both the sides, perused the material available on record and gone through the orders of the authorities below. 8. The only issue for consideration before us is whether the assessee is eligible for deduction under section 80-IA(4) of the Act or not? Under the similar set of facts for the earlier assessment year i.e. Assessment Year 2011-12, the coordinate bench of the Tribunal in ITA No. 15/Vizag/2015, by order dated 29/04/2015 has considered the facts and other relevant material, passed a detailed order by holding that the assessee is eligible for deduction under section 80-IA(4) of the Act. For the sake of convenience, the relevant portion of the order of the Tribunal is extracted is under:- "8. In circular no. 18/2009 dated 08/06/2009 issued by the Central Board of....
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.... onward transit and outright export, transshipment, etc., take place. An ICD would have its own automated system with a separate station code [such as INTKD 6, INSNF6 etc.] being allotted by Directorate General of Systems and with in-built capacity to enter examination reports and enable assessment of documents, processing of manifest, amendments, etc. Container Freight Stations are specified as customs area under Clause (b) of the said Section 8 wherein imported goods or export goods are ordinarily kept before clearance by the customs. A CFS is only a Customs area located in the jurisdiction of a Commissioner of Customs exercising control over a specified Customs port, airport, LCS/lCD. A CFS cannot have an independent existence and has to be linked to a Customs station within the jurisdiction of the Commissioner of Customs. It is an extension of a Customs station set up with the main objective of decongesting the ports. In a CFS only a part of the Customs processes mainly the examination of goods is normally carried out by Customs besides stuffing/destuffing of containers and aggregation/segregation of cargo. Thus, Custom's functions relating to processing of manifes....
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.... (Condition of Transhipment) Regulations, 1995. On the other hand, movement of goods from a port/airport/LCS or an ICD to a CFS is akin to local movement from a Customs area of the Customs station to another Customs area of the same station, covered by local procedure evolved by the Commissioner of Customs and covered by bonds, bank guarantee, etc. Further, the person undertaking the transhipment would be required to follow the prescribed procedure." As rightly contended by the learned AR of the appellant, the above circular answers in a very clear and categorical manner the objections raised by the assessing officer. 9. As far as the contention that there is no agreement with any Government or statutory authority, we find that the assessee has placed on record letter of intent. In fact the Ministry of Commerce and Industry, vide letter dated 10/02/2005, written to the Managing Director of the assessee company regarding setting up of a CFS at Visakhapatnam apropos the assessee's case. 10. In the case of A L Logistics P. Ltd. (supra) the Chennai Bench of the Tribunal at para 7 held as follows: "7. Now, we proceed to the next issue, whether in the ....
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....ch the approval granted would be automatically cancelled. 2. The facility to be set up shall be fully computerized, with EDI compatibility and a minimum complement of equipment and accessories as necessary shall be made available at the facility. The indicative list of equipment/accessories considered necessary is annexed. The status regarding confirmation of the installation! availability of the items shall be furnished to the appropriate authorities to facilitate issue of requisite notification. 3. Please acknowledge receipt of this letter. Yours faithfully, Sd/- (N.G. Biswas) DIRECTOR" A perusal of clause 'b' of the above letter shows that the assessee was required to execute necessary bond and guarantees with the concerned Commissioner of customs an -Central Excise. It was only on the compliance of all the terms and conditions mentioned in the aforesaid letter that the assessee was allowed to carry on the services of CFS. The assessee on the compliance of the terms and conditions as mentioned in the letter, was notified as CFS Complex for the purpose of receiving, storing, import containers, receiving/consolidating export cargo etc. v....
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....ade by the Finance Act, 1983, with effect from May 13, 1983. Simultaneously, clause (aa) was inserted in sec. 7(1) of the Act under which the CCHI issue notification appointing the places which alone shall be considered as inland container depots for the unloading of imported goods and loading of exported goods. The Central Board of Excise and Customs issued a clarification that inland container depots were inland ports. The power to notify infrastructure facilities for the purpose of the section was taken away from the Central Board of Direct Taxes w.e.f. April 1,2002. However, there was no provision made in the Act saying that notifications issued earlier would cease to have from April 1, 2002.The assessee, a public sector undertaking, was engaged in the business of handling and 12 transportation of containerised cargo. The activity of the assessee was carried out mainly on its inland container deports, Central freight stations see had a total of 45 inland container depots. It claimed special deduction under section 80-IA(4) for the assessment years 2003-04 to 2005-06. The Assessing Officer denied special deduction but the Tribunal allowed it. On appeal to the High Court: ....