Excise Duty Refund Under Industrial Promotion Scheme: ITAT Declares It Capital Receipt, Not Taxable [Read Order]
The tribunal relied on its previous decisions for assessment years 2005-06 and 2006-07, where similar refunds were treated as capital receipts, concluding that the refund was intended for industrial development.
![Excise Duty Refund Under Industrial Promotion Scheme: ITAT Declares It Capital Receipt, Not Taxable [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/03/exicse-duty.jpg "Excise Duty Refund Under Industrial Promotion Scheme: ITAT Declares It Capital Receipt, Not Taxable [Read Order]")
The Delhi Bench of Income Tax Appellate Tribunal(ITAT) ruled that the excise duty refund received under the industrial promotion scheme in Gujarat's Kutch District was a capital receipt and not taxable. Jindal Saw Ltd,appellant-assessee,appealed against the order dated 16.08.2018 for the AY 2004-05 passed by Commissioner of Income Tax(Appeals)[CIT(A)] which upheld the Assessing...
The Delhi Bench of Income Tax Appellate Tribunal(ITAT) ruled that the excise duty refund received under the industrial promotion scheme in Gujarat's Kutch District was a capital receipt and not taxable.
Jindal Saw Ltd,appellant-assessee,appealed against the order dated 16.08.2018 for the AY 2004-05 passed by Commissioner of Income Tax(Appeals)[CIT(A)] which upheld the Assessing Officer(AO)'s decision to treat the excise duty refund as a revenue receipt instead of a capital receipt.
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The assessee's counsel stated that the tribunal had earlier treated the excise duty refund as a capital receipt for AY 2005-06 and 2006-07. A copy of the order was submitted.
The two member bench comprising C.N.Prasad (Judicial Member) and Naveen Chandra(Accountant Member) reviewed the submissions, lower authorities' orders, and its decisions for the assessment years 2005-06 and 2006-07. It referred to Notification No. 39/2001-Central Excise issued by the Central Government to promote industrial growth in the Kutch District of Gujarat after the earthquake. The scheme offered excise duty refunds to new units set up between July 31, 2001, and December 31, 2005.
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The appellate tribunal noted that the taxpayer had established eligible units within the specified period and received excise duty refunds. Although the refunds were initially treated as revenue receipts, the CIT(A) accepted the taxpayer's claim, holding them as capital receipts based on their purpose.
Read More:Excise duty Refund are Purely Capital Receipts, not Chargeable to Tax: ITAT
Relying on previous rulings, the ITAT concluded that the refunds aimed at promoting industrial development were capital receipts and not taxable.
In short the appeal filed by the assessee was allowed.
To Read the full text of the Order CLICK HERE
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