Judgment :- K.L. Manjunath, J. The revenue has come up in this appeal challenging the legality and correctness of the order passed by the Income Tax Appellate Tribunal, Bangalore, in I.T.A.No.398/Bang/1998 dated 31.5.2004. The appeal was admitted to consider the following substantial questions of law: (1) Whether the Tribunal was correct in holding that the excise duty paid by the assessee on goods manufactured but not sold during the year and reflected as closing stock during the year is liable to be allowed as an expenditure during the current year itself? (2) Whether the Tribunal was correct in holding that in view of Section 43-B of the Act the excise duty paid is liable to be allowed despite the clear mandate of the provision not being understood in the proper perspective? (3) Whether the Tribunal was correct in holding that excise duty, sales tax and scrap sales are not includible in the total turnover for the purpose of deduction under Section 80-HHHC and 80HHHE of the Act. 2. At the time of arguments, the learned Counsel appearing for both the parties submit that the questions-1 and 2 are considered by this Court in ITA No.4/2002 answering the same in favour of the assessee and against the revenue. Therefore, they request the Court not to consider these two questions as it is already considered. Accordingly, questions No. 1 and 2 are answered against the revenue. 3. In the light of the submissions of the learned Counsel for the parties, we have to consider only the question of law No. 3 in this appeal. 4. In order to appreciate the case of the parties, it is useful to refer to that facts of this case. The Assessee – Company filed the return of income for the assessment year 1993-94. It is engaged in the manufacture of goods. The goods are exported and are also sold in domestic market. The assessee claimed deduction under Sections 80HHC and 80HHE of the Act. Based on the total turnover while computing the total turnover, the assessee had not included the amount realised by it by selling the scrap material produced during the course of manufacture. The goods which were exported as well as sold in domestic market. The assessee claimed deduction under Sections 80HHC and 80HHE of the Act. Based on the total turnover while computing the total turnover, the assessee had not included the amount realised by it by selling the scrap material produced during the course of manufacture. The goods which were exported as well as sold in domestic market. Similarly, it had also not included exercise duty and sale tax paid by the assessee on the entire total turnover which is inclusive of the goods sold domestically as well as exported. It also includes exercise duty paid by it on the amount of the sale value received by it by selling the scrap. The Assessing Officer did not accept the deduction claimed by the assessee in regard to the amount realised from the sale of scrap and exercise duty paid thereon. On the ground that, while computing deductions under Section 80HHC and 80HHE, the total turnover includes the value of the scrap sold by the assessee by filing an appeal before the Commissioner of Income-Tax (Appeals). The Commissioner of Income-Tax (Appeals), affirmed the order of the Assessing Officer under Sections 80HHC and 80HHE by his order dated 24.3.1998. Being aggrieved by the same, the assessee filed an appeal before the Income Tax Appellate Tribunal. The Appellate Tribunal considering the same has granted relief to the assessee on the ground that the amount released from sale of scrap cannot be included under the total turnover. Accordingly, relief was granted to the assessee by the Income Tax Appellate Tribunal. Being aggrieved by the order of the Income Tax Appellate Tribunal, the present appeal is preferred by the revenue. 5. Sri. Sheshachala, learned Counsel appearing for the revenue relying upon Section 80HHC, sub-section (3)(1)(a) contends that the value received by the assessee from sale of scrap shall also be included while computing the total turnover. According to him, the definition of the word, ‘export turnover’ is altogether different from the definition of ‘total turnover’ for the purpose of computing deduction under Sections 80HHC and 80HHE. Relying upon the definition clause of total turnover and export turnover, he contends that the Tribunal has committed a serious error in giving relief to the assessee. According to him, the definition of the word, ‘export turnover’ is altogether different from the definition of ‘total turnover’ for the purpose of computing deduction under Sections 80HHC and 80HHE. Relying upon the definition clause of total turnover and export turnover, he contends that the Tribunal has committed a serious error in giving relief to the assessee. According to him, the export turnover means, the sale proceeds (received in or brought into India) by the assessee in a convertible foreign exchange (in accordance with clause (a) of sub-section (2) on any goods or merchandise to which this section applies and which are exported out of India, but does not include freight or Insurance attributable to the defined in the Customs Act, 1962. According to him, the total turnover shall not exclude freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in Customs Act, 1962. Relying upon the definition of export turnover and total turnover as defined under Section 80HHC (4C) explanation (b) and (ba) of the Income-Tax Act as under: “80HHC” (4C) ………………………………… Explanation – (b) ‘export turnover’ means the sale proceeds received in, or brought into, India by the assessee in convertible foreign exchange in accordance which clause (a) sub-section (2) of any goods or merchandise to which this section applies and which are exported out of India, but does not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962); (ba) “total turnover’ shall not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962): Provided that in relation to any assessment year commencing on or after the 1st day of April, 1991, the expression ‘total turnover’ shall have effect as if it also excluded any sun referred to in clauses (iiia), (iiib), (iiic), (iiid), and (iiie) of Section 28.” he contends that the export turnover is different from total turnover. Therefore, while computing the deduction under Section 80 HHC for the purpose of computing total turnover, the Assessing Officer was required to consider the value received by the assessee from the sale of scrap which is germinated while manufacturing the end products of the assessee. 6. Therefore, while computing the deduction under Section 80 HHC for the purpose of computing total turnover, the Assessing Officer was required to consider the value received by the assessee from the sale of scrap which is germinated while manufacturing the end products of the assessee. 6. The learned Senior Counsel appearing for the assessee relying upon the Judgment of the Madras Higher Court reported in (2008) 297 ITR 107 in the case of Commissioner of Income-Tax Vs. Ashok Leyland, contends that income from scrap sale cannot be treated as part of turnover for the purpose of computing under Section 80HHC and 80HHE. He further relied upon the Judgment of the Madras High Court in Commissioner of Income Tax Vs. Shiva Distilleries Limited, (2007) 293 ITR 108 (Mad). Relying upon these two decisions, he contends that if the value of the scrap is taken into consideration under the head total turnover cost of the raw materials would artificially go up. According to him, while computing the total turnover, the value of the scrap received by the assessee cannot be taken into consideration since it is not an export sale. He further contends that the Madras High Court in CIT Vs. Madras Motors Limited/M.M. Forgings Limited, (2002) 257 ITR 60 has fairly held that for the purpose of computing Section 80HHC, only the turnover relating to export business of the assessee shall be taken into account and not the turnover relating to the other business of the assessee. Relying upon these two decisions, he requests the Court to answer the question of law against the revenue and in favour of the assessee. 7. Having heard the Counsel for the parties, we have to consider whether the value received by the assessee by selling the scrap in a domestic market has to be included towards its total turnover while calculating under Section 80HHC. By looking into the definition of export turnover and total turnover as defined under Section 80HHC explanation (b) and (ba), it is clear they are different and distinct turnover. The export turnover includes only the value received by selling the products of the assessee from out of country. But total turnover includes the turnover of the assessee which is inclusive of export turnover and also the domestic turnover. The export turnover includes only the value received by selling the products of the assessee from out of country. But total turnover includes the turnover of the assessee which is inclusive of export turnover and also the domestic turnover. Therefore, we are of the view that in view of the distinct definition clause of export turnover and total turnover, while computing the total turnover for the purpose of Section 80HHC, the Assessing Officer is required to consider the value received by the scrap also, as the same cannot be excluded as the sale of scrap amounts to a turnover in a domestic market. 8. We have carefully considered the Judgments relied upon by the learned Senior Counsel appearing for the assessee. In the two Judgments relied upon by him, the Madras High Court did not actually consider the definition of export turnover and total turnover while computing the sale of scrap. Without considering the provision of law properly, the Madras High Court has taken a view that the value of the scrap received by the assessee cannot be computed for the purpose of Sections 80HHC and 80HHE, under the sold total turnover. Therefore, we are not in a position to accept the decision relied upon by the learned, Counsel for the assessee as the Madras High Court did not consider the definition of export turnover, and total turnover as defined under Section 80HHC explanation (b) and (ba). 9. In the circumstances, we have to answer the question of law in this appeal in favour of the revenue and against the assessee. 10. Having held so, we are of the opinion that the matter requires to be reconsidered by the Assessing Officer for the purpose of computation of deduction under Section 80HHC as the excise duty paid by the assessee for selling scrap has to be excluded. Only for this limited purpose, the matter is remanded to the Assessing Officer for the quantification of the deduction. 11. In view of our answer to the question of law, we are of the opinion that the assessee is entitled to exclude the excise duty and sales tax paid on the total turnover and in view of our finding on the question of law in regard to the sale of scrap, the Assessing Officer is required to quantity the excise duty on the scrap sale alone. Only for this purpose the matter is remanded. Only for this purpose the matter is remanded. In regard to excise duty and sales tax on the total turnover, the said question has been answered by this Court in ITA No.81/03 in favour of the assessee. Therefore, there is no necessity for us to consider the same. 12. Accordingly, the Appeal is allowed and remanded to the Assessing Officer.