Taxpoint: Sieving to separate dust particles is manufacture under the SEZ Act 2005: HC

Sieving to separate dust particles is manufacture under the SEZ Act 2005: HC

IN THE HIGH COURT OF JUDICATURE AT MADRAS

The Relevant Text of the Order as follows :

10. The CIT(A) after considering the factual position accepted the submission of the assessee that the semi finished material purchased by the assessee is not marketable and usable in the industry, as what is purchased by the assessee includes silicon, sand and waste, which cannot be marketed as such, unless the waste materials are removed. The flow chart, which was produced by the assessee before the Assessing Officer, was referred to CIT(A) and he came to the conclusion that the Assessing Officer was himself mislead by the nomenclature used in the Gate Pass. After considering the factual materials, the CIT(A) concluded that the process done by the assessee would qualify as ‘manufacture’, under the SEZ Act.

11. The Revenue carried the matter by way of appeal to the tribunal and the tribunal once again re-appreciated the factual position and found that there is a process of ‘manufacture’ as defined under the SEZ Act, which takes place in the SEZ unit and also pointed out that the Assessing Officer himself has accepted that the assessee‘s unit, processed the raw materials by removing 10 to 20% impurities.

Cost comparison of the semi finished product with that of the raw material was also referred to and it was also pointed out that the Assessing Officer could not establish that the assessee has suppressed the purchase cost of semi-finished goods in order to claim higher deduction under Section 10AA of the Act. Furthermore, the certificate issued by the Assistant Development Officer was accepted on the ground that the revenue could not prove the same to be not genuine. Therefore, the tribunal sustained the factual finding recorded by the CIT(A).

12. Thus, in our considered view, the entire factual matrix has not only been analyzed by the CIT(A), but, also by the tribunal. Therefore, we are convinced to observe that no question of Law much less any Substantial Question of Law arises for consideration in this appeal. Accordingly the Tax Case Appeal fails and the same is dismissed. No Costs.

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Tags: Judgement, High Court