JUDGMENT in this application under Section 133 (4) of the Income Tax Ordinance 2001, the department sought to refer the following questions for the opinion of this Court: "A Whether, when sales inclusive of excise duty have been declared, excise duty is to be debited to the manufacturing and trading account or to profit and loss account.
B. Whether the ITAT was, in the facts and circumstances of the case justified in law to hold that excise duty in the instant case was to be debited to profit & loss account when such excise duty had already been debited to manufacturing and trading account."
2. Mr. Shahid Jamil Khan, Advocate appearing for the applicant did not press question No. A and only addressed his arguments on question No. B by stating that the above said question being a question of law arose from order dated 30.10.2003 of the learned Income Tax Appellate Tribunal, Lahore Bench, Lahore whereby the departmental appeal was rejected being devoid of merits. And also that the denial of the learned appellate Tribunal to refer the said question through order dated 11.5.2004 was also unlawful. The learned counsel for the Revenue also sought to create a distinction qua the excise duty as an indirect incidence of tax viz the direct taxation thereof.
3. We have considered the submissions of the learned counsel for the applicant Revenue. We do not find a question of law of substantial importance or otherwise arises in the matter. The learned Tribunal while denying the application for reference validity held in order dated 11.5.2004 that: "If the excise duty is indeed passed on in full to the purchaser and is not relatable to inputs at all as appears to be the case have then obviously it has no bearing on product cost and it cannot therefore be charged to the manufacturing trading account but is required to be charged to the P&L account, If on the other hand excise duty were relatable to inputs/production then to the extent that it enters into product costs, it is required to be charged to the manufacturing account. "
4. in view of the above, this departmental application is held to be without any merit and is accordingly rejected.