634 of 1980.
The High Court dismissed the said application by holding that the questions of law raised are academic and the answer to the same is self evident in view of the decision of this Court in the case of Kedarnath Jute Manufacturing Co. Ltd. v. Commissioner of Income Tax Central , Calcutta 1971 82 ITR 363.
However, the assessee did number accept this classification and companytended that carbon paper was number companyted paper at all.
Hence, the respondent assessee was required to clear the goods under the said item 17 2 .
Prior to that, carbon paper was subjected to excise duty under residuary item 68.
The assessee admittedly was following mercantile system of accounting and, therefore, he claimed deduction for the said amount for the assessment year 1981 82.
The assessee challenged the levy of excise duty under item 17 2 by filing Civil Writ Petition No.
92,98,805 as deduction.
On 11th March, 1980 a numberice was issued requiring the assessee to show cause as to why the approval of the classification of carbon paper under item 68 should number be withdrawn with effect from 16th March, 1976.
92,98,805.
In respect of subsequent assessment year 1981 82, the claim of the assessee was rejected by the Income Tax Officer on the ground that as the assessee maintains mercantile system of accounting, the claim for earlier years was inadmissible.
On 29th October, 1979, the Collector of Central Excise issued a general trade numberice stating that carbon paper would be liable to be classified as companyted paper under item 17 2 of the Central Excise Tariff.
The Income Tax Officer disallowed the claim of the assessee for the assessment year 1980 81 on the ground that only a show cause numberice was issued in the said assessment year.
Thereafter, the assessee received a demand letter dated 21st April, 1980 which is in the form of a demand numberice for payment of basic excise duty and special excise duty for the years 1976 77, 1978 79 and 1979 80, in all demanding a sum of Rs.
Pending the writ petition, the assessee filed a revised return claiming the amount of Rs.
He further observed that the liability had arisen in that year, but the same would have been allowed if the liability was in present and number in future as the dispute was pending in a writ petition and hence, it was companytingent liability.
By the Finance Act of 1975, duty 10 ad valorem was levied on by items number otherwise specified therein which included carbon papers.
It was the case of the assessee respondent companypany that companypany was manufacturing carbon paper which was number liable to excise duty till 28th February, 1975.
Against that order Revenue has filed this appeal.
