LAWS(MAD)-2010-12-453

COMMISSIONER OF INCOME-TAX Vs. SOFT BEVERAGES (P) LTD

Decided On December 10, 2010
COMMISSIONER OF INCOME-TAX Appellant
V/S
Soft Beverages (P) Ltd Respondents

JUDGEMENT

(1.) Investment allowance for the assessment year 1983-84 was denied to the Assessee, a manufacturer of aerated waters under the brand name of 'TORINO', such manufacturing activity having been carried on under a licence, on the ground that the aerated waters manufactured by it contained blended flavouring concentrates. The Assessee having appealed to the Commissioner against that view of the assessing officer, the Commissioner accepted the Assessee's case that the original entry without the explanation, did not take in it's fold synthetic essences which are admittedly used by the Assessee and that the explanation that was added subsequently did not have retrospective effect. That view of the Commissioner has been affirmed by the Tribunal.

(2.) It is not in dispute that synthetic essences are used by the Assessee for the purpose of flavouring the aerated waters. The essence is in the form of concentrate and is clearly a flavouring concentrate. It is synthetic essence. The very term 'synthetic' denotes a thing which is not natural. In the making of the synthetic essence more than one ingredient is employed. The interaction of two or more ingredients is capable of being broadly viewed as blending. Synthetic essences, therefore, are clearly blended flavouring concentrates.

(3.) Learned Counsel for the Assessee, however, submitted that a learned single Judge of this Court has, in a case concerning the same Assessee, held that synthetic essence is not a blended flavouring concentrate. Our attention was invited to the case of Soft Beverages Pvt. Ltd., Madurai v. Union of India, 1982 10 ELT 119.. We find from that judgment that the learned single Judge had not examined the question as to whether synthetic essence is a blended flavouring concentrate. It has been stated in that judgment that there was no dispute that the Assessee was not using blended flavouring concentrate. That was a case which arose under the Central Excise Act and any concession made therein by the Excise authorities would not bind the Revenue here. That judgment, in our view, does not lay down the law correctly. 'Blended flavouring concentrates' would take within their fold synthetic essences which are concentrates used for providing flavour and which concentrates are blended.