|COURT:||Bombay High Court|
|CORAM:||B. P. Colabawalla J, S. C. Dharmadhikari J|
|CATCH WORDS:||CENVAT incentive scheme|
|DATE:||August 13, 2014 (Date of pronouncement)|
|DATE:||October 12, 2014 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 80HHC: Deemed credit under the CENVAT Incentive Scheme is part of the business profits eligible for deduction u/s 80HHC|
We agree with the submission of Ms Vissanjee that the said CENVAT incentive being the refund of tax and duty paid on inputs consumed for goods manufactured and exported would automatically reduce the cost of manufacture of the exported goods, thereby necessarily increasing the profit. In view thereof, the deemed credit under the CENVAT Incentive Scheme at Rs.89,34,887/- would be a part of the business profits eligible for a deduction under section 80HHC.
In the present case, it can hardly be argued that the deemed credit under the CENVAT Incentive Scheme would not reduce the material / manufacturing cost of the goods exported by the Assessee. This was not the case of the Revenue also. That being the case, under the provisions of section 80HHC, the Assessee would be entitled to a deduction to the extent of the profits referred to in sub-section (1-B) thereof derived by the Assessee from the export of such goods or merchandise. No other provision was brought to our notice that would justify the disallowance of CENVAT incentive whilst computing the admissible deduction u/s 80HHC of the Act.