TMI Tax Updates - e-Newsletter
May 24, 2012

Case Laws in this Newsletter:

Income Tax Customs Service Tax Central Excise

Articles

1. SETTLEMENT OF CASES UNDER SERVICE TAX

   By: Dr. Sanjiv Agarwal

2. Penalty for concealment of income under section 271(1) ( c )- not applicable in case tax payable is imposed by way of MAT – says the Supreme Court by dismissing appeal of revenue .

   By: DEVKUMAR KOTHARI

3. For benefit of revenue: Care required by revenue officers.

   By: DEVKUMAR KOTHARI

4. SERVICE TAX TERMINOLOGY – PART-VII

   By: Dr. Sanjiv Agarwal

5. Unscrew the Negative list

   By: CSSwati Rawat

6. Conflict of Service Tax and Tax Deducted at Source

   By: Rakesh Chitkara

News

1. GST to Make Goods and Services more Competitive both in Domestic and International Markets: FM

2. GST to Make Goods and Services more Competitive both in Domestic and International Markets: FM.

3. 21 bills passed by the Parliament during Budget Session- 2012 Pawan Kumar Bansal says Government very keen on Passing of the Lokpal Bill

4. Steel Minister Reviews Annual Performance of RINL

5. International Crude Oil Price of Indian Basket increase on 22.05.2012 to US$ 106.95/BBL

6. Financial Sector Legislative Reforms Commission (FSLRC) Seeks Submissions/ Views for its Report; To Circulate an Approach Paper by October, 2012

7. Strong Faith in Resilience of Indian Economy: FM

8. CSR Fund Allocation of Maharatnas and Navratnas

9. Payment of EPF

10. Amended DTAA Between India and Switzerland Comes into Force ; Undisclosed Income Worth Rs.565 Crore Detected and Tax Worth Rs.181 Crore Realized

11. India’s Eligibility for Soft Loan

12. Fluctuations in Growth Rates of GDP

13. Functioning of Private Banks

14. Opening of No Frills Accounts for Rural Customers

15. Various Initiatives Taken by Central Government on Economic Front in Last Three Years

16. Auction for Sale of Government Stocks

17. Approach Paper of 12th Five Year Plan (2012-17) Propose a Faster More Inclusive and Sustainable Growth with a Target of 9 Per Cent Annual Growth Rate of GDP

18. Many Recommendations of Shilbhadra Banerjee Committee Report Implemented

19. Final Guidelines on Basel III Capital Regulations Issued by RBI

20. Education Loans for Engineering Students

21. Varuous Community Development Programmes Undertaken by PSBs in North Eastern States

22. Various Measures Undertaken to Curb the Menace of Terror Funding and Fake Currency

23. Subsidy Worth Rs. 2, 16, 297 Crore Payable in 2011-12

24. Government Reverts to the Path of Fiscal Consolidation; Fiscal Deficit to be Reduced to 5.1% of GDP in 2012-13

25. Redemption of preference shares is "transfer" even if both issuer and subscriber companies are under same management as they are both distinct juridical entities

26. Condition necessary for availing immunity from penalty under section 271AAA - assessee must have paid tax along with interest, with no time limit set for such payments.

27. Interest on deposits for availing bank guarantee is business income includible in 'book profit' for purposes of section 40(b)

28. Interest U/s. 234A to 234C Not Payable If Assessment Order Silent

29. Justice V.S.Sirpurkar takes over as New Chairman of the Competition Appellate Tribunal of India.

30. Auction for Sale of Government Stocks.

Notifications

Companies Law

1. G.S.R. 352(E) - dated 10-5-2012 - Co. Law

Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012

Customs

2. 28/2012-Customs (ADD) - dated 21-5-2012 - ADD

Seeks to extend the validity of Notification no. 56/2007-Customs, dated the 12th April, 2007, by one more year, i.e. upto and inclusive of 11th April, 2013.

3. 44/2012 - dated 21-5-2012 - Cus (NT)

Rate of exchange of conversion of each of the foreign currency with effect from 22nd May, 2012.

Circulars / Instructions / Orders

FEMA

1. 129 - dated 21-5-2012

Risk Management and Inter Bank Dealings.

Companies Law

2. 10/2012, - dated 21-5-2012

Guidelines for declaring a financial Insitution as Public Financial Institution under section 4A of the Companies Act, 1956

Highlights / Catch Notes

Income Tax

• Payments to German firm under Cost Allocation Agreement deemed taxable royalty income in India for R&D expenses.

  Case-Laws - AAR : Whether payments made to the applicant (a company based in Germany), in terms of the Cost Allocation Agreement, can be treated as income in the hands of the applicant and whether it is not merely a reimbursement of the expenses incurred for the Research and Development. - held as royalty and taxable in India - AAR
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• Labeling, Tailoring, and More: Manufacturing Activities Qualify for Deductions u/s 80-I of Income Tax Act.

  Case-Laws - HC : Deduction under Section 80-I - activities of labeling, tailoring, packing, pakki checking, buttons and button holes, linking etc. to be held as manufacturing activity. - HC
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• Assessee's Net Surplus from Investment Sale Taxed as Capital Gains, Not Business Income, per Section 45.

  Case-Laws - AT : Business income vs. capital gain - net surplus shown by the assessee is the capital gain on account of the sale/redemption of the assessee's investment and the same is taxable under the head 'capital gains' and not as business income. - AT
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• Court Deletes Baseless Assessment of Bank Deposits u/ss 69 and 69C of Income Tax Act.

  Case-Laws - AT : Addition of bank deposits u/s 69 - Assessee assessed u/s 44AF - the deposits assessed by the lower authorities u/s. 69 and 69C of the Act is without any basis, hence deleted - AT
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• Interest Levy Under Sec 234B is Mandatory, But Imposition Requires Judicial Review and Legal Provision Reference.

  Case-Laws - HC : Levy of interest u/s 234B - The mandatory nature of charging of interest and the actual charging of interest by application of mind and the mention of the proviso of law under which such interest is charged are two different things. - HC
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• High Court Admits Appeal on PAN Card Process Issues, Citing Harassment and Inconvenience to Citizens Without Clear Tax Benefits.

  Case-Laws - HC : Difficulty and harassment in relation of PAN card - inconvenience and harassment without any palpable advantage or benefit to the Department. - Appeal admitted and notices issued. - HC
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• Residential Flat Exchange Qualifies as New Construction; Eligible for Capital Gains Tax Exemption u/s 54 of Income Tax Act.

  Case-Laws - AT : Exchange of residential flat - exemption from capital gains u/s 54 - . The acquisition of a new flat under a development agreement in exchange of the old flat amounts to construction of new flat. - AT
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• Foreign Company Capital Gains Assessed via Agent; Notice Required Within 2 Years u/s 163 Income Tax Act.

  Case-Laws - HC : Capital gains in the hands of the Foreign Company - assessment in the hands of an agent under Section 163 - , the notice shall not be issued after the expiry of a period of two years from the end of the relevant Assessment Year - HC
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• Court Affirms Legitimacy of Share Sale, Emphasizes Consistent Transaction Assessment Without Specific Evidence Challenging Purchase Validity.

  Case-Laws - AT : Allegation of fictitious sale of shares - Once the purchase of shares is not doubted, then in our considered view, the sale of same shares should not have been doubted. - AT
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• Taxpayer's Intent and Income Classification: Short-Term Gains or Business Income for Same-Day Transactions?

  Case-Laws - AT : Short term capital gain or business income - Purchases in the same scrip on the same day has been divided into speculation and investment - the only intention of the assessee in the impugned case is just to reduce the tax liability by treating a part of the profit as short term capital gain - AT
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• Court Rules Excess Payment for Intangibles as Goodwill, Affects Depreciation in Tax Laws.

  Case-Laws - AT : Depreciation on intangible goods - whether excess amount paid is goodwill or intangible asset - held as goodwill - AT
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• Trials Costs Outside In-House R&D Not Eligible for Weighted Deduction Under Income Tax Act Section 35(2AB.

  Case-Laws - AT : Deduction u/s. 35(2AB) - weighted deduction - The expenditure incurred on trial conducted outside the in-house R and D facility will not be eligible for weighted deduction under section 35(2AB). - AT
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Customs

• Refund Claim for Coal Cess Rejected Due to Unjust Enrichment Despite Clarification Indicating Non-Payability.

  Case-Laws - AT : Refund of the Coal cess - paid initially at the time of import which subsequently has been clarified to be not payable - refund rejected on the ground of unjust enrichment. - AT
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• Circular on Target Plus Scheme Deemed Ultra Vires to Foreign Trade Policy and Customs Notification.

  Case-Laws - HC : Target Plus Scheme - Foreign trade policy - the conditions which were stipulated by the circular dated 8 May 2007 were ultra vires paragraph 3.7.6 of the Foreign Trade Policy and Customs notification dated 8 April 2005 - HC
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• Customs Notification No. 56/2007 validity extended by one year; new expiry date is April 11, 2013.

  Notifications : Seeks to extend the validity of Notification no. 56/2007-Customs, dated the 12th April, 2007, by one more year, i.e. upto and inclusive of 11th April, 2013. - Notification
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• New Exchange Rates for Foreign Currencies Effective May 22, 2012 Under Customs Regulations: Tax Implications Alert.

  Notifications : Rate of exchange of conversion of each of the foreign currency with effect from 22nd May, 2012. - Notification
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FEMA

• New Guidelines for Risk Management and Interbank Dealings Under FEMA: Enhancing Compliance and Stability in Financial Markets.

  Circulars : Risk Management and Inter Bank Dealings. - Circular
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Corporate Law

• Section 4A of Companies Act, 1956: Criteria for Declaring a Financial Institution as Public Financial Institution.

  Circulars : Guidelines for declaring a financial Insitution as Public Financial Institution under section 4A of the Companies Act, 1956 - Circular
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• Companies Must Disclose Unpaid and Unclaimed Funds Under Investor Education and Protection Fund Rules, 2012.

  Notifications : Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012 - Notification
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Indian Laws

• Supreme Court rules no penalty for income concealment u/s 271(1)(c) if taxed under Minimum Alternate Tax.

  Articles : Penalty for concealment of income under section 271(1) ( c )- not applicable in case tax payable is imposed by way of MAT – says the Supreme Court by dismissing appeal of revenue . - Article
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• Tax Officers Must Balance Fair Collection with Taxpayer Rights: Adhere to Legal Guidelines and Ensure Transparency.

  Articles : For benefit of revenue: Care required by revenue officers. - Article
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Service Tax

• Tour Services in Package Tours Must Be Included in Gross Value for Service Tax, Not Classified as Reimbursements.

  Case-Laws - AT : Package tour services - TTD darshan, sightseeing in RFC etc. are supplementary services rendered by the appellant in relation to package tour, the collections for the same from the tourists cannot be typified as 'reimbursements'. - to be included in gross value - AT
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Central Excise

• Cenvat Credit Valid Even Without Clearances Under Notification No. 29/04; Final Product Not Fully Exempted.

  Case-Laws - AT : Cenvat Credit - Merely because during the relevant period, when the capital goods were received in their factory, there were no clearance by availing the benefit of Notification No. 29/04, will not make their final product as fully exempted. - AT
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• Tax Demands on Informal Records Deemed Unsustainable in Clandestine Removal Cases Under Central Excise Laws.

  Case-Laws - AT : Clandestine removal - confirmation of demand on the basis of katcha parchis cannot be held to be sustainable. - AT
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• Cenvat Credit Approved for Tool Kits and First Aid Kits Sold with Final Product; Costs Included in Product Price.

  Case-Laws - AT : Cenvat credit allowed on tool kit and first aid kit are sold by the appellant along with final product and their cost is included in the same. - AT
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• Company Registers Non-Manufacturing Unit for Excise Due to Space Constraints in Main Facility.

  Case-Laws - AT : Storage of manufactured goods to non manufacturing unit - due to shortage of space in their manufacturing unit, they took Central Excise registration for Unit III but no manufacturing activity was undertaken in the said Unit III - AT
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• Eligibility for Cenvat Credit on SAD: Is Loading Software on ADSL Modems a Manufacturing Activity?

  Case-Laws - AT : Cenvat Credit of additional duty (SAD) - process / activity on the modems imported - loading of software/software patches on ADSL - whether manufacturing activity or not - AT
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• CENVAT Credit Reversal Required for Waste from Packing Material in Excise Duty Case on Scrap Handling.

  Case-Laws - AT : Duty on waste and scrap – packing of intermediate/final goods - packing material has become waste - reversal of cenvat credit - AT
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Case Laws:

• Income Tax

• 2012 (5) TMI 345
  Whether payments made to the applicant (a company based in Germany), in terms of the Cost Allocation Agreement, can be treated as income in the hands of the applicant and whether it is not merely a reimbursement of the expenses incurred for the Research and Development. - held that:- The theory of reimbursement propounded cannot stand. - The payment occurs only when the process or scientific experience is used by a member. It is not a sharing of costs or reimbursement of a part of the expenses incurred for the research as and when it is completed. Since it is a payment for use and the payment depends solely on use, the payment can be understood only as royalty. Royalty income liable to be taxed in India under Article 12.2 of the DTAC between India and Germany.

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• 2012 (5) TMI 344
  Penalty u/s 271 - all the additions in respect of commission expenses of Rs.10,46,163/-, clearing and forwarding expenses of Rs.2,01,037/- and fees and legal expenses of Rs.1,10,200/- (totalling to Rs.13,57,400/-) have been disallowed holding that the assessee has violated the provisions of section 40(a) (ia) of the IT Act and that the AO has levied penalty on the said amount - held that:- the learned CIT(A) on proper appreciation of the facts of the case, considering the submissions of the assessee and the citations referred to by the assessee before him, has rightly deleted the penalty

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• 2012 (5) TMI 343
  Transfer pricing - Arm's Length Price (ALP) - Most Appropriate Method (MAM) - held that:- , there is no fault in the reasoning of the TPO in adopting the cost plus method (CPM) as the MAM. In this background and in view of the facts of the case we are of the considered view that the CPM is the MAM as adopted by the TPO for arriving at the value of international transactions and the ALP and interference in her action is required by the Panel. - Decided against the assessee. Restriction on deduction u/s 10B - held that:- The DRP has not dealt with each of the objections of the assessee by passing a speaking order there against and by ascribing cogent reasons for not accepting the objections of the assessee. - matter remanded for fresh decision.

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• 2012 (5) TMI 342
  Disallowance of sales consultancy charges - to three persons are HUFs - payments were made through account payee cheques. - held that:- The only grievance of the revenue is that details of nature of services rendered by the HUFs and how those services were utilized for the business of the assessee, were not filed by the asesssee. We are of the view that since the said required details are necessary to decide the issue, we restore the issue to the file of the AO to decide the issue after examining the details. Addition on account of depreciation on fixed assets - held that:- assessee had produced copy of electricity and water bills paid and it is true that these bills are raised in the name of the previous owner but the said payments are effected by the assessee as the bank account show as the payment made by cheque. - Decided in favor of assessee. Payment of relatives - market rate of interest on loans - interest paid by the assessee to the individuals @ 18% per annum on borrowed capital - held that:- AO has not disputed the loan, its usage or quantum of interest paid, therefore, the interest cannot be disallowed. - Decided in favor of assessee.

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• 2012 (5) TMI 341
  Deduction under Section 80-I - manufacturing and trading of hosiery garments such as pullovers, mufflers and blankets etc. - labeling, tailoring, packing, pakki checking, buttons and button holes, linking etc. - AO opined that these processes did not amount to manufacturing activities or production of articles. - held that:- It is worthwhile to notice that in para 23 of the judgment of Hon'ble the Supreme Court rendered in the case of Arihant Tiles & Marbles (P) Ltd. (2009 (12) TMI 1 (SC)), Hon'ble Mr. Justice S.H. Kapadia (now Hon'ble Chief Justice of India) highlighted another aspect observing that if the view of the revenue namely that the activities undertaken by the assessee- respondent was not in the nature of 'manufacture, was to be accepted then it would have had serious revenue consequences. It was noticed by his Lordship that the assessee- respondent were paying excise duty and some of them were job workers and their activities were recognized by various government authorities as 'manufacture' - Decided in favor of assessee.

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• 2012 (5) TMI 340
  Non deduction of TDS u/s 194C - Cash payment in violation of the provisions of Section 40A(3) - held that:- findings of fact recorded by the Tribunal cannot be interfered with particularly when it has made cash payment exceeding Rs. 20,000/- in violation of the provisions of Section 40A(3) of the Act. There is ample evidence on record to support the aforesaid finding and accordingly a sum of Rs. 33,97,674/- were not allowable as expenditure. - Decided against the assessee.

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• 2012 (5) TMI 339
  Penalty u/s 271(1)(c) - held that:- He has been regularly assessed to tax and charge of concealment of income has never been raised against him. The retirement benefits were deposited in a different account on which income accrued from month to month. He forgot to include such income as in past no such account was there. Looking to these facts, we are of the view that such omissions may take place by a retired person due to lapse of memory. In such circumstances, the explanation is held to be bona fide. Therefore, the levy of penalty is cancelled.

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• 2012 (5) TMI 338
  Capital expenditure or revenue expenditure - amount spent on application software - matter remitted back to AO for fresh consideration. Addition on account of excess claim of expenditure - held that:- if the addition has been made for the same amount during the year under consideration which was earlier made on account of excess provision of sales bonus made in the earlier year, then it can safely be said that the same amount for the same incentive has been added for the year under consideration, which is against the provisions of law because the same income cannot be taxed twice. - Matter remitted for proper verification and decision.

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• 2012 (5) TMI 337
  Reassessment - notice u/s 148 - ceased liability - deemed income u/s 41(1) - held that:- it can be easily seen that both the issues were within the knowledge of the Assessing Officer while original assessment was being framed. Not only that the assessee had disclosed all facts pertaining to these issue but had made further clarifications in response to the queries raised by the Assessing Officer. Thus, it cannot be said that there was failure on the part of the assessee to truly and fully disclose all material facts. In the present case, therefore, when the assessment is sought to be reopened beyond the period of four years from the end of the relevant assessment year, the same would not be permissible.

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• 2012 (5) TMI 336
  Deduction u/s 80HHC - direct cost - indirect expenses - held that:- Ld. JM is right in holding that only indirect costs attributable to export have to be reduced for computing the deduction u/s 80HHC in respect of export of trading goods and not all costs other than direct costs. In other words, first, attribution of indirect costs to the export of trading goods is to be made and then only scaling down in proportion is to be resorted to. - Decided in favor of assessee. Decision of Kerala High Court in the case of Parry Agro Industries Ltd. (2002 (3) TMI 9 (HC)) distinguished.

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• 2012 (5) TMI 335
  Business income vs. capital gain - sale and purchase of shares - Held that: - net surplus shown by the assessee is the capital gain on account of the sale/redemption of the assessee's investment and the same is taxable under the head 'capital gains' and not as business income. Regarding disallowance u/s. 14A - Rule 8D of the Income Tax Rules, 1962 - Hon'ble Bombay High Court in the case of Godrej and Boyce Mfg. Co. Ltd. vs. DCIT (2010 (8) TMI 77 - BOMBAY HIGH COURT) has already held that applicability of Rule 8D of the Rules as prospective and not retrospective w.e.f. assessment year 2007-08, wherein Hon'ble High Court has also directed to recompute disallowance in case there is a nexus for expenses with exempt income by laying down the principle - Appeal is allowed by way of direction to AO to restrict the disallowance at 1% of exempted income as expenses related to this income

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• 2012 (5) TMI 334
  Reopening - Exemption u/s 10(23C)(iiiab) - assessee is a University and it did not file its Returns for Assessment Years 2004-05 to 2007-08 voluntarily but filed in response to notice u/s. 148 of the Act on 08.10.2009 after claiming income as exempt u/s. 10(23C)(vi) of the Act as accruing to the assessee from principal activity of education - according to AO the assessee does not satisfy the conditions either of section 10(23C)(vi) or 10(23C)(iiiab) of the Act. and he disallowed the exemption claimed by assessee in all these years on the same premise - assessee is a University, governed by Governing Council consisting of 10 Members including the Chancellor, who is the Governor of the State of Sikkim - The Government also contributed Rs.30 cr. in Assessment Year 1999-2000 and Rs.23.37 cr. by way of annual grant during the Fin. Years 1997-98 to 2009-10 Held that:- it is clear that the University does exist solely for education but not for making profit as well as the assessee is substantially financed by the Government. In our view, since all the conditions prescribed u/s. 10(23C)(iiiab) of the Act have been satisfied, the income of the assessee for all assessment years is exempt.

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• 2012 (5) TMI 333
  Search and seizure - Block assessment - Held that:- the material on record that all that was found during the search of the premises of Gopalakrishna was certain chits and documents which does not conclusively indicate undisclosed income by the assessee, adding of Rs. 1,50,000/- by holding that the said amount has been kept in fixed deposit by Ramachandra is not at all based upon the seized material as what was found was not the fixed deposit receipt and further in view of the settled principles of law that when deduction had been made at source while making the payment, the receipt cannot be said to be undisclosed - Decided in favor of the assessee

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• 2012 (5) TMI 332
  Addition of bank deposits u/s 69 - Assessee assessed u/s 44AF - assessee is engaged in the business of supply of building material on retail basis and submitted its return of income as on 31.03.2004, 16.11.2005 and 31.03.2007 for the relevant assessment years 2003-04, 2005-06 and 2006-07 under section 139(4) of the Act - The assessee prepared profit and loss account, Balance Sheet and Trading Account and also noted turnover calculated on the basis of these katcha books - Assessing Officer denied computation of income under section 44AF of the Act to assessee on the ground that he has maintained books of account in all three years but by going through accounts prepared by assessee and argued by the Counsel that these are maintained by assessee on the basis of rough/katcha books where sales and purchases are recorded and these are strictly followed - Held that: the deposits and withdrawal are matching with the turnover for all the three assessment years and assessee has declared its income u/s. 44AF of the Act and moreover, the assessee's receipts has nexus with deposits, the deposits assessed by the lower authorities u/s. 69 and 69C of the Act is without any basis, hence deleted - Decided in favor of the assessee

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• 2012 (5) TMI 331
  Addition made under section 41(1) on account of value added tax refund receivable by AO – CIT deleted the addition – Held that:- VAT receivable by the assessee is not to be credited as income without waiting for the refund order by the VAT authority - it is not an automatic refund and is depending on the decision of the commercial tax authority who has to adjudicate the claim - it is not a benefit accrued to the assessee during the year as the claim was not adjudicated by the commercial tax authority - against revenue Dis-allow deduction (DEPB credit) in computing the total income by AO – CIT made credit deduction - Held that :- decided in the case of CIT v. Kalpataru Colours and Chemicals (2010 - TMI - 76895 - BOMBAY HIGH COURT) that DEPB credit is liable to be taxed in the year of issue of credit or in the year of sale of credit - In schedule 9 to the balance-sheet ended with March 31, 2007 the export benefit (DEPB) realisation is shown as Rs. 27,83,209.74 under the head "Other income". It is amply clear that the assessee has not sold DEPB credit during the relevant year. Therefore, the assessee is justified in excluding the same – against revenue.

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• 2012 (5) TMI 320
  Levy of interest u/s 234B - held that:- Even if any provision of law is mandatory and provides for charging of tax or interest, the view taken in Ranchi Club Ltd. is that such charge by the assessing officer should be specific and clear and assessee must be made to know that the assessing officer has applied its mind and has ordered charging of interest. The mandatory nature of charging of interest and the actual charging of interest by application of mind and the mention of the proviso of law under which such interest is charged are two different things. - Decided in favor of assessee. Investment allowance under section 32A (1) - machinery installed in Hotel - Industrial Undertaking - held that:- Matter remanded back.

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• 2012 (5) TMI 319
  Difficulty and harassment in relation of PAN card - inconvenience and harassment without any palpable advantage or benefit to the Department. - Appeal admitted and notices issued.

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• 2012 (5) TMI 318
  Disallowance of interest - capitalization - Explanation 8 to sec. 43(1) - business from a rented premises - held that:- Through this ground, the assessee is contending that if deduction of interest amounting to Rs. 6.57 lakhs is not allowed, then such amount should be allowed to be capitalized to the cost of office/godown and depreciation may be allowed on the same. We accept this ground partly to the extent of allowing capitalization of this amount of interest to the cost of office/godown. However, we are not inclined to grant any depreciation on it for the reason that the said office and godown have not admittedly been put to use for the current year. This additional ground is, therefore, partly allowed. Unaccounted sale - shortage in goods - held that:- The return for the said assessment year 2004-05 was scrutinized by the AO and assessment order was passed u/s. 143(3). Page no. 161 to 164 of the paper book is a copy of the assessment order for assessment year 2004-05, from which it can be seen that no addition on account of shortage was made. Thus, it becomes evident that the shortage of 2.93% has been accepted by the Revenue for the assessment year 2004-05. In that view of the matter, there is no reason to reject lower net shortage of 2.17% for the current year. In view of the foregoing reasons, we are of the considered opinion that the authorities below were not justified in making and sustaining the addition of Rs. 29.22 lakhs on this count, which is hereby ordered to be deleted. These grounds are, therefore, allowed.

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• 2012 (5) TMI 317
  Transfer pricing - international transactions - selection of comparable - TPO rejected the CUP method - held that:- the first appellate authority was wrong in basing his decision on the fact that RBI has granted permission. This is not a ground to allow an appeal. Every remittance would bear the approval of RBI. The ground that the TPO has not brought out any evidence on record that part of the money paid to AEs was returned back to the assessee is also not a basis contemplated under T.P. provisions. The fact that expenses were audited and payments were through banking channels are not issues that determine the transfer pricing adjustment. These are not grounds on which a transfer pricing adjustment could be deleted. Hence the CIT(A) was wrong on basis in his decision on these findings. Nevertheless as the TPO has not given any reason as to why the method adopted by the assessee i.e., CUP method is not acceptable as the most appropriate method and as the Assessing Officer has not adopted any of the methods prescribed under the Act and has method adopted by the TPO cannot be called TNMM prescribed under the Act and Rules, we have to necessarily uphold the Order of the first appellate authority, though for different reasons. - Decided in favor of assessee.

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• 2012 (5) TMI 316
  Exchange of residential flat - exemption from capital gains u/s 54 - held that:- the assessee had exchanged old flat with new flat to be constructed by the builder under development agreement which amounts to transfer under section 2(47) of the Act. - Thus, the only other condition which is required to be satisfied is that assessee either purchases a new residential flat within the prescribed limit or constructs a new residential flat within a period of 3 years from the date of transfer. The acquisition of a new flat under a development agreement in exchange of the old flat amounts to construction of new flat. - Decided in favor of assessee. Taxability of compensation of Rs. 7,01,460/- received by the assessee for alternate accommodation during the period of construction of property for 18 months. - held that:- displacement compensation is not related to any capital asset. - he compensation had been paid in connection with the alternate accommodation given to the assessee to facilitate construction of the flat. Since the actual rent paid by the assessee for the alternate accommodation was lower than the amount received, there was net income to the assessee which has been rightly taxed as income from other sources. - Addition confirmed - Decided against the assessee.

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• 2012 (5) TMI 315
  Taxability of an amounted received after an order of High Court in an interim order - accrual of income - held that:- the impugned receipt will have to be brought to tax as trading receipt in this assessment year and if and when the assessee pays the said impugned amount back to the concerned party, it would be entitled to claim deduction for the assessment year during which the amount ought have been paid/ refunded to the said party. - Decided in favor of revenue.

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• 2012 (5) TMI 314
  Transfer pricing - arm's length price - extraordinary expense - selection of comparable - held that:- Since the adjudication on this issue has resulted in operating margin of the assessee at 17.80% which is higher than the operating margin of 17.09% earned by the comparable companies selected by the TPO, international transactions undertaken by the assessee satisfies the arm's length criteria. - In such scenario, as agreed by both the counsel, adjudication of another Transfer Pricing issue in this regard is infructuous. Expenditure on activity of the shifting of office versus re-establishment of business - held that:- The said expenses incurred on relocation of the office are essentially revenue expenses in as much as it did not result in enduring benefit in the capital field - allowed as revenue expenditure. Recruitment expenses - revenue or capital - held that:- the assessee incurred an aggregate amount of Rs. 20,70,000/- as recruitment expenses, being expenses incurred in relation to hiring of employees, which were paid to consultants and for advertisement and other incidental expenses as revenue expenditure. We agree that the aforesaid expenditure are essentially on revenue account and did not result in either an enduring benefit in capital filed or creation of capital assets - Decided in favor of assessee.

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• 2012 (5) TMI 313
  Deduction u/s 80HHC - Whether Explanation (e) to sub-sec. (3) to section 80HHC can override the clause (b) to section 80HHC(3) of the Income-tax Act, 1961 - held that:- only indirect costs attributable to export have to be reduced for computing the deduction u/s 80HHC in respect of export of trading goods and not all costs other than direct costs. In other words, first, attribution of indirect costs to the export of trading goods is to be made and then only scaling down in proportion is to be resorted to.

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• 2012 (5) TMI 312
  Capital gains in the hands of the Foreign Company - assessment in the hands of an agent under Section 163 - held that:- - Under sub-Section (3) of Section 149 if the person on whom a notice is issued under Section 148 is a person treated as the agent of a non-resident under Section 163 and the assessment, re-assessment or re-computation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of two years from the end of the relevant Assessment Year - The notice under Section 163 is in aid of the action of the Revenue in bringing to tax the capital gains arising out of the transfer of shares of the Bermudian Company because according to the Revenue, this involved the transfer of a capital asset in India - the plain consequence of the provisions of Section 149(3) is that no assessment, re-assessment or re-computation can take place after 31 March 2008 - Decided in favor of the assessee

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• 2012 (5) TMI 311
  Allegation of fictitious sale of shares - held that:- Once the purchase of shares is not doubted, then in our considered view, the sale of same shares should not have been doubted. If assessee has invested his own money under the garb of fictitious sale of shares then where the actual shares purchased by assessee which were duly demated have gone. - since the purchase of shares is genuine, the sale of the same shares should have been treated as genuine. - Decided in favor of assessee. Unexplained jewellery - held that:- This is a case of jewellery found relating to many persons in the family. - If all these facts are taken into consideration, then we are of the view that the addition of Rs. 1,50,000 is sustained and the remaining addition is deleted.

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• 2012 (5) TMI 310
  Short term capital gain or business income - dealing in shares and securities - held that:- The detail of such investment through computer itself shows that assessee smartly but intentionally switched over its trading business to the investment business to have undue advantage of lower tax rate provided for short term capital gain - the intention of the assessee appears to be whimsical. - Purchases in the same scrip on the same day has been divided into speculation and investment - the only intention of the assessee in the impugned case is just to reduce the tax liability by treating a part of the profit as short term capital gain - Decided against the assessee

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• 2012 (5) TMI 309
  Reopening - Exemption under s. 10B - reconstruction of old unit - requirement of plant and machinery - only needles and scissors are required for cutting, finishing and packing. - held that:- In the present case, there had been no business in the old unit of the assessee for over five years before the start of production by the new EOU - it is seen that for eligibility for deduction under s. 10B of the Act, it is nowhere the requirement of the section that plant and machinery must be used for manufacture or production of goods or articles - s. 10B of the Act is a provision directed towards encouraging industrialization by permitting an assessee to set up a new industrial undertaking to claim relief from tax to the extent prescribed The next objection of the Department is that the assessee has utilized the infrastructure of its sister concern - assessee has maintained that the opening stock of raw materials lying with the company was very old and obsolete and was of no use to the new EOU of the company; and that such stock was also actually never used in the business of the new undertaking - The process carried on by the assessee, as such, definitely amounts to manufacture - held that the learned CIT(A) has gone wrong in sustaining the non-allowance of the exemption claimed by the assessee under s. 10B of the Act, with regard to the assessee's new EOU - Decided in favor of the assessee

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• 2012 (5) TMI 308
  Validity of block assessment - Legality of search and seizure - jurisdiction of the AO - no warrant of authorization in the individual name of the assessee - jurisdiction to pass the order u/s. 158BC - held that:- no individual warrant of authorisation was issued and warrant of authorisation of search was in the joint names, therefore keeping in view the ratio laid down in the aforesaid referred to cases, we are of the view that in the present case the assessment framed u/s. 158BC is not maintainable - Decided in favor of the assessee

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• 2012 (5) TMI 307
  Deduction u/s. 80I - 4th stage of expansion of unit - Held that:- unless the deduction is withdrawn or rejected in the initial assessment year, the same cannot be withdrawn in the subsequent assessment years - Decided in favor of the assessee

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• 2012 (5) TMI 306
  Depreciation - cost of acquisition of cement unit - Explanation 3 to section 43(1) of the I.T. Act - Held that:- The registered valuer also valued the assets as on 01.11.1999, the price of which was considered to be the cost of fixed asset acquired and the balance to the current assets including the current liabilities. - no reason to invoke Explanation (3) as the A.O. nowhere stated that the main purpose of such a valuation was for reduction of liability to tax. - Decided in favor of the assessee. Lump-sum payment - Deferred revenue expenses - assessee was entitled to benefit over a period of three years - held that:- lump-sum prepayment premium for restructuring of loan resulting in deduction on rate of interest is allowable as interest and that section 43B(d) also permits such deduction of payment. Depreciation on intangible goods - whether excess amount paid is goodwill - held that:- the nature of payment has to be considered and terminology used in the books of account does not determine the allowability of claim. - held that:- assessee has made a vague claim. On the one hand it states the excess payment made, over and above the value of tangible asset acquired, is for licences, quotas, business rights etc. and whereas on the other hand it states the excess amount should be taken as that paid for factors like locational advantage, contracts with dealers and customers attached to the business etc. This second limb, in our view cannot be a business or commercial right but only goodwill. While stating facts, alternate or without prejudice stand cannot be taken. The assessee is supposed to know exactly the purpose for which the amount is paid. While tangible assets were valued, intangible assets were not valued in this case - held as goodwill - decided against the assessee.

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• 2012 (5) TMI 305
  Deduction u/s. 35(2AB) - weighted deduction - in-house research and development facility - held that:- expenditure on clinical trial though the same is an integral part of scientific research will be eligible for weighted deduction under section 35(2AB) only if the expenditure is incurred on an in-house research and development facility. The expenditure incurred on trial conducted outside the in-house R and D facility will not be eligible for weighted deduction under section 35(2AB). - Decision in the matter of Concept Pharmaceuticals (2010 (11) TMI 147 (Tri)) followed. - Decided against the assessee.

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• 2012 (5) TMI 304
  Method of accounting - Assessing Officer observed in his order that that the assessee has not shown work-in-progress with profit and loss Account for the relevant previous year ended with 31.03.2004 - Held that:- The choice of the method of accounting lies with the assessee - the accounting policy consistently followed by the assessee wherein all the income and expenses were wholly accounted for and offered as such in the profit and loss account as and when it was received or incurred, there arises no work-in-progress with relation to expenses incurred on the on-going projects as the whole is offered as income/expenses - Matter remanded back. Regarding addition u/s 69 - bogus purchase - transactions were in remote areas where proper banking facilities and trading channels were not present. - assessee has transferred the amounts from his accounts with UCO Bank,Barakka Branch to the account of Mr. S. Das with the same Branch - The black wire purchase details/quantity were also mentioned. It clearly establishes that this money from the assessee's account went to Mr. S. Das who acted as an agent for the assessee in procuring black wire from the local market which has been sufficiently explained to the satisfaction of the authorities. - Decided in favor of assessee. Regarding retention money - Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT (1996 - TMI - 5626 - SUPREME Court - Income Tax) which permits the Tribunal to admit the additional ground as it does not require any investigation of facts and it can be adjudicated upon - Appeal is allowed by way of remand to AO

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• Customs

• 2012 (5) TMI 330
  Refund of the Coal cess - paid initially at the time of import which subsequently has been clarified to be not payable - unjust enrichment - held that:- the cess amount has been booked under the expenses and therefore, the same forms part of the cost of cement manufactured by the appellants. Hence, this certificate does not support the claim of the appellants that they have not passed on the extra duty to their customers as part of the price of cement manufactured by them. - refund rejected on the ground of unjust enrichment.

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• 2012 (5) TMI 329
  Quantum of fine and penalty imposed - hazardous goods - appellants are themselves willing to re-export the goods at their own cost - redemption fine and penalty reduced.

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• 2012 (5) TMI 328
  Target Plus Scheme - Foreign trade policy - entitlement to credit at the rate of 15% of the incremental growth - requirement to indicate the name of the export product - circular dated on 8 May 2007 - actual user condition - sale of goods (almonds) in the open market. - misuse of the Target Plus Scheme - Held that:- there should exist a “broad nexus” between the goods which are imported and the goods which are exported - ‘broad nexus’ would mean goods imported with reference to any of the product groups of the imported goods within the overall value of the entitlement certificate. - the goods imported against the certificate shall not be transferred or sold. - Paragraph 3.7.6 on its plain construction, does not incorporate a requirement that the goods which are imported as inputs must find physical incorporation in the export products in relation to which the benefit of the Target Plus Scheme is claimed. The Foreign Trade Policy, it is well settled, is referable to the provisions of Sections 4 and 5 of the Foreign Trade Development and Regulation Act, 1992. The policy cannot be amended by an administrative circular. - the circular does not in this case supplement the policy or fill up an interstitial space. - the conditions which were stipulated by the circular dated 8 May 2007 were ultra vires paragraph 3.7.6 of the Foreign Trade Policy and Customs notification dated 8 April 2005 (Customs Notification 32/05).

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• 2012 (5) TMI 303
  Refund - amendment of bill of entry in terms of Section 17 or Section 149 of the Customs Act, 1962 - After clearance they found that the goods were eligible for concessional rate of duty under notification No.25/98-Cus and 69/04. Accordingly, they filed refund claim for the customs duty paid under the aforesaid bill of entry - contention of the Revenue is that the respondent has at no stage challenged the assessment order, therefore, the refund claim was rightly rejected by the lower adjudicating authority – Held that:- in the case of Priya Blue Industries (2004 - TMI - 47045 - SUPREME COURT OF INDIA – Customs), proper course for claiming the benefit of the notification was by way of filing appeal against the assessment order, Commissioner (Appeals)'s order is set aside and Revenue's appeal is allowed

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• 2012 (5) TMI 302
  Refund - exchange rate was wrongly mentioned in Euro instead of US $. In this manner they paid duty in excess and on realizing - lower adjudicating authority rejected their refund claim on the ground that they have not challenged the assessment order – Held that:- case is remanded to lower adjudicating authority to decide the case afresh by allowing the amendment under Section 154 and in case the refund is allowable, the same should subject to question of unjust enrichment, appeal is disposed of

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• 2012 (5) TMI 301
  Confiscation of 3.6 MTs of diesel – stock in the vessel - smuggled goods – goods released provisionally against band and bank guarantee - Held that:- Commissioner ought to have confiscated the entire quantity (147 + 3.6 MTs) under Section 120(2) without splitting the stock in the manner he did, confiscation of this quantity of diesel is liable to be upheld, major part of the above stock was legally acquired by the appellant and no duty thereon was demanded by the Revenue, fine of Rs.1,00,000/- will be fair and justifiable. After deducting the aforesaid fine of Rs.50,000/- already paid by the appellant, appeal is disposed of

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• Service Tax

• 2012 (5) TMI 351
  Cenvat credit for payment of Service Tax on the GTA service - appeal of the Revenue before Hon ble Punjab & Haryana High Court stand decided and vide its decision reported in (2011 (5) TMI 779 (HC)) , the same stand rejected. - Earlier order of dismissal recalled - Credit allowed.

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• 2012 (5) TMI 350
  Business of booking on behalf of goods transport agency - Commission income - Business auxiliary service (BAS) - held that:- notification No. 1/2009-ST dated 5.1.09 vide which services falling under Section 65 (105) (zzb) provided by an assessee to GTA were exempted. - Circular No. 334/13/2009 TRU dated 6.7.2009 vide which by appreciating the difficulty of GTA service provider, Government extended the promise to drop all past demands of litigations, by giving retrospective effect to the notification in question. - matter remanded back for de novo consideration.

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• 2012 (5) TMI 349
  Service Tax on the commission received in distribution of pre-paid SIM, Re-charge coupons, Top-up card and other vouchers under various schemes as an authorized distributor - held that:- as soon as it was pointed out to the assessee that the Service Tax is required to be paid, the assessee discharged the same with interest and also filed ST-3 returns with late fees. - the request for treatment of the amount received as cum-tax amount is allowed and the assessee is entitled to consequent relief, if any. - penalty under Section 76, 77 and 78 of Finance Act, 1994 cannot be sustained.

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• 2012 (5) TMI 348
  Construction services - abatement in terms of notification No. 15/04 and 18/05. - held that:- no suppression or malafide can be attributed to the respondents. There were interim orders during the relevant period by the Hon ble High Court of Delhi which stand noted by the Commissioner (Appeals) in his order while extending the benefit of Section 80. - Penalty not to be imposed.

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• 2012 (5) TMI 347
  Exemption Notification No. 12/03 dated 12.6.03 - Commissioner (Appeals) extended the benefit of Section 80 by observing that they were seeking clarification from the Revenue which was not responded. He also recorded that there was no suppression on the part of the respondents. - appeal filed by the Revenue rejected.

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• 2012 (5) TMI 346
  Package tour services - Tour operator - valuation - gross value - inclusion - TTD darshan ticket charges, RFC entry fees, hill transportation charges and waterfleet charges - held that:- TTD darshan, sightseeing in RFC etc. are supplementary services rendered by the appellant in relation to package tour, the collections for the same from the tourists cannot be typified as 'reimbursements'. - Such collections do not answer the test laid down in the above order of the Tribunal and are necessarily to be part of the taxable value. - The decision in Scott Wilson Kirkpatrick's case (2006 (10) TMI 4 (Tri)) was based on a circular of Director-General of Service Tax. Nobody has relied on any DGST circular before us. - Decided against the assessee. Benefit of abatement - held that:- The appellant is entitled to abatement to the extent of 60% on the gross taxable value (including all the said charges) under Notification No. 39/1997-ST up to 28/02/2006 and under Notification No. 1/2006 from 01/03/2006 to 22.8.2007. They can claim 75% abatement under the latter Notification (as amended) from 23.8.2007. Cenvat credit - nexus between output and input service - held that:- the credit In question cannot be allowed to the appellant inasmuch as, in this appeal, they have not brought out any nexus between the so-called input services (architect services and technical services) and the tour operator's service. Their claim that they are eligible for the credit under the CENVAT Credit Rules 2004 remains Ipse dixit as they have not shown that the said services fell within the ambit of the definition of 'input service' under rule 2(1) of the CENVAT Credit Rules 2004. - Decided against the assessee. Extended period of limitation - held that:- The definition of 'tour operator' came to be amended twice during the material period and Notification No. 39/97-ST was superseded by Notification No.1/06-ST and the latter was amended by Notification No.38/07-ST, all these during the material period. It appears, these changes created confusion in the mind of the appellant on the question whether the charges/fees collected by them from tourists for TTD darshan, RFC visit, boat cruise etc. were to be included in the gross taxable value of tour operator's service for the purpose of claiming abatement. In our view, in these circumstances, it was not correct on the part of the Department to allege that the appellant had wilfully suppressed facts with intention to evade payment of service tax. - Decided in favor of assessee. Penalties - benefit of section 80 - "reasonable cause - held that:- the appellant can legitimately claim the benefit of Section 80 of the Act. Both the penalties are liable to be set aside on this ground.

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• Central Excise

• 2012 (5) TMI 327
  Refund - cenvat credit reversed at the instance of audit party - Subsequently, they filed a refund claim of the same on the ground that no notice stand issued by the Revenue. - The claim was rejected by the authorities on the ground that the appellant having accepted their duty liability, there was no need of any show cause notice. - held that:- there was no dispute on the said reversal made by the appellant, nor such reversal made by the appellant under protest, the appellant can be said to have accepted their duty liability and discharged the same in response to the objections made by the audit under the provisions of Section 11 A (2b). - Decided against the assessee.

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• 2012 (5) TMI 326
  Manufacturing of textile products - Cenvat Credit - Notification No. 29/04-CE and Notification No. 30/04-CE whereas the notification No. 29/04-CE permitted concessional rate of duty subject to availment of modvat credit, Notification 30/2004-CE allowed unconditional exemption. - held that:- Merely because during the relevant period, when the capital goods were received in their factory, there were no clearance by availing the benefit of Notification No. 29/04, will not make their final product as fully exempted. - benefit of cenvat credit allowed.

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• 2012 (5) TMI 325
  Shortage in manufactured goods - clandestine removal - held that:- apart from the shortages, which are also contested by the assessee, inasmuch as there was no proper stock taking, there is no evidence showing the manufacture of the goods and their clearances without payment of duty. The clandestine removal being a positive act, the burden of proving the same is on the Revenue and cannot be discharged on the basis of conjectures and assumptions. - Decided in favor of assessee.

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• 2012 (5) TMI 324
  Clandestine removal - incriminating documents in the shape of katcha parchis - held that:- there is no positive cogent evidence relating said katcha parchis to the goods manufactured - No buyers stand identified along with identification of transporter etc. - confirmation of demand on the basis of katcha parchis cannot be held to be sustainable. - Decided in favor of assessee.

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• 2012 (5) TMI 323
  Cenvat credit - inputs - the tool kit and first aid kit are sold by the appellant along with final product and their cost is included in the same. - held that:- input means and includes accessories of final product cleared along with final product. - the appellant had supplied the tool kit and first aid kit to the buyers as per statutory requirements under Central Motor Vehicle Rules, 1989 as accessories to be used in relation to the manufacture of vehicle. Thus, both tool kit and first aid kit in our view are squarely covered by the definition of input given under Section 2(k)(i) of Cenvat Credit Rules and that the appellant had rightly availed the cenvat credit in relation to tool kit and first aid kit. - Decided in favor of assessee.

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• 2012 (5) TMI 322
  Clandestine removal - manufacture of non-alloy steel ingots. - held that:- apart from the photocopies of the notices, there is virtually no evidence indicating or evidencing any clandestine removal by the respondents. The buyers of the final product allegedly cleared by them, as reflected in the invoices have not been approached by the Revenue and examined. Neither there is any statement of transporters. - Decided in favor of assessee.

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• 2012 (5) TMI 321
  Credit of service tax paid on different services for the purpose of paying duty in respect of various goods manufactured - held that:- In view of decision in MURUGAPPA MANAGEMENT SERVICES LTD & Others (2011 (10) TMI 501 (Tri)) and Ultratech Cement Ltd. (2010 (10) TMI 13 (HC)) while decided the issue in favor of assesse, matter remanded back for fresh decision.

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• 2012 (5) TMI 300
  Storage of manufactured goods to non manufacturing unit - due to shortage of space in their manufacturing unit, they took Central Excise registration for Unit III but no manufacturing activity was undertaken in the said Unit III except for certain minor activities such as checking and inspecting the raw materials received in respect of the quality. - held that:- for mere storage of imported goods/excised goods, the appellants cannot claim Central Excise registration under Rule 9 of the Central Excise Rules, 2002. - Penalty confirmed - Registration invoked.

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• 2012 (5) TMI 299
  Cenvat Credit of additional duty (SAD) - process / activity on the modems imported - loading of software/software patches on ADSL - whether manufacturing activity or not - held that:- the appellant had entertained a bonafide belief that the activity carried out by them on such modems were, in fact, amounting to manufacture. - If the appellant had entertained a bonafide belief that they were carrying out manufacturing activity and discharged Central Excise duty, there cannot be any error or intentions attributable on their part for availing credit of CVD paid on modems, when they were imported. - Extended period of limitation is not invokable - Decided in favor of assessee.

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• 2012 (5) TMI 298
  Waiver of pre-deposit of penalty - appellant has availed inadmissible credit of the basic custom duty and special additional customs duty which they were not entitled to take - appellant submits that the appellant are public sector undertaking and there is no intention of the appellant to evade payment of duty or to take inadmissible CENVAT credit – Held that:- appellant is not entitled to take CENVAT credit on basic excise duty and special additional customs duty which they have availed without any authority of law, option given to the appellant to pay 25% of duty as penalty within 30 days of the communication of this order, appeal as well as stay application are disposed of

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• 2012 (5) TMI 297
  Application for restoration of their appeal - condonation of delay in filing restoration application - petition for stay on recovery - appellant plead that the notices for hearing and the orders passed by the Tribunal dismissal their appeal were never received by them which is clear from the fact that all the communications were returned undelivered by the postal authorities – Held that:- appellant for delay in filing of application for restoration of appeal are genuine and hence delay is condoned, appeal for non-compliance to the provisions of Section 35F is recalled and the appeal filed by the appellant is restored to its original number. The appellant are given the time of four weeks from the date of this order to deposit the amount, miscellaneous application and the application for condonation of delay and ROA stand disposed of

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• 2012 (5) TMI 296
  Demand of duty on clearance of re-processed goods - respondents had received back certain products manufactured by them on being rejected, for further processing – Held that:- processes carried out by the respondent on the duty paid finished goods which were received back by them being rejected would not amount to manufacture and hence no duty was payable by the respondent on the reprocessed goods, appeal dismissed

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• 2012 (5) TMI 295
  Duty on waste and scrap – packing of intermediate/final goods - packing material has become waste - Held that:- if assessee has availed cenvat credit on such packing material, he is liable to pay duty on such waste. - From the facts of this case, it is not coming out that how much waste has been arisen on account of packing materials of raw materials i.e. inputs and how much packing materials have been procured by the assessee on payment of duty. - matter remanded back for re quantification.

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