9911796707
TMI Blog1998 (2) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... it issued declaration forms in form G2 to the sellers of craft paper and purchased the same. The paper so purchased was given to a unit which was making boxes on job-work to whom only labour charges were paid and the boxes so made were actually utilised by the assessee for packing the chemicals manufactured by the assessee. The assessing authority was of the opinion that the issue of G forms for the purchase of paper was an improper utilisation of the concession allowed under section 5-B because the paper was not used in the assessee's industry/manufacturing unit, but was actually used by another manufacturing unit. The underlying assumption was that if the other manufacturing unit had purchased the paper directly and manufactured the boxe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so paid the tax for the purchase of craft paper with the result that there will be two incidents of tax, though both had a concessional rate, aggregating to receipt of revenue more than what had actually accrued in this case. He submitted that if the assessee is not manufacturing corrugated boxes, he is not entitled to issue a "G" form and thereby it must be considered to be a misuse of form for which penalty can be imposed under section 5-B(2). That section reads as under: "5-B(2). If any dealer, (i) not having his manufacturing unit within the State purchases any goods by furnishing a declaration under the proviso to sub-section (1); or (ii) having his manufacturing unit within the State and having purchased goods by furnishing a decl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-assemble part, intermediate part, consumables and packing material. Except the packing material, all other items are inputs in the manufacturing activity of the purchasing dealer. Obviously, packing material cannot be an input in the item manufactured by the purchasing dealer. 3.. Rule 30-A provides that, "every manufacturer who intends to purchase raw materials, etc., for use in the manufacture of goods inside the State shall submit an application for registration as manufacturer". Sub-rule (2) provides that only if the assessing authority receiving the application is satisfied after making such enquiry as he considers necessary that the application is bona fide and the particulars furnished are correct, then registration will be mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ohibition either in the Act or Rules or even in the declaration that the assessee who purchased the craft paper for use as packing material cannot make it into boxes before using it as packing material. There can be no denial of the fact that the craft paper was actually used as packing material only and hence clearly there was no misuse of the goods purchased. The assumption of the department is that if the assessee could have followed a different process, viz., buying the boxes instead of buying the paper having made into boxes it would have generated more revenue. But as long as there is no prohibition against the assessee arranging its affairs in such a way as to have the boxes made through job-work and using the material for the same s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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