GOA CARBON LTD. Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) These appeals relate to the different assessment years in respect of the same assessee namely Goa Carbon Limited and involve a common point. Hence, all the appeals are disposed of by this common judgment. Learned Counsel for the parties stated that all the relevant papers have been filed in Tax Appeal No. 13 of 2005. Hence it would be appropriate to state the facts therein.

(2.) The appellant is a company involved in manufacture of calcined petroleum coke (hereinafter referred to as the "CPC" ) which is used for : making pre-baked anodes or carbon paste by the aluminum smelters for production of basic aluminum metal; as a carbon raiser for making carbon steel by the steel mills, foundries and steel plants; production of titanium dioxide; cathodic protection of cross countries oil/gas pipe lines; other miscellaneous uses for chemical industry; and anodes for dry cell batteries. Large part of the CPC manufactured by the appellant is exported. The appellant claimed deduction in respect of profit arising out of the export of the CPC. The Assessing Officer allowed to the appellant a deduction of the export profit under Section 80 HHC of the Income Tax Act, 1961 ( for short 'the Act'). However, the Commissioner of Income Tax ( for short the "CIT") exercising jurisdiction under Section 263 of the Act set aside the assessment order in so far as it related to the deduction under Section 80HHC. The CIT was of the view that the CPC was a mineral coke i.e. to say a residue obtained on refining petroleum crude by subjecting it to a process of calcination and, therefore, it was a processed mineral which was not specified in the Twelth Schedule of the Act. Aggrieved by the decision of the CIT, the appellant filed an appeal before the Income Tax Appellate Tribunal ( hereinafter referred to as the "ITAT"). The ITAT held that the CPC was manufactured from the raw material called as raw petroleum coke ( for short the "RPC"), commercially known as green coke, which in turn was obtained from petroleum crude which was a mineral oil. Hence the CPC was also a form of "mineral oil" and in view of sub section 2(b) of Section 80HHC, the provision of deduction under Section 80HHC(1) of the Act was not applicable to the CPC manufactured by the appellant. The ITAT therefore, confirmed the decision of CIT that the appellant was not entitled for deduction of the export profit derived from exports of the CPC under Section 80 HHC of the Act. The common decision of the ITAT dated 27th December, 2004 passed in several appeals ( in respect of assessment years 1995-1996, 1997-1998, 1998-1999, 2000-2001) is the subject matter of this appeal.

(3.) By an order dated 29th August, 2005, this Court admitted the appeal on the following substantial question of law :