Issues: Whether the extended period of limitation could be invoked to demand service tax solely from income-tax data without investigation into the nature of the appellant's activities.

Analysis: The demand was founded entirely on income-tax information, without further investigation establishing the service rendered, recipient, or receipt of consideration for taxable services. Form 26AS did not disclose receipts for provision of services during the relevant period. The specific explanation that the receipts related to trading in plant saplings and seeds was not meaningfully investigated. The business activities provided sufficient basis for a bona fide belief that service-tax registration and payment were not required. Suppression or wilful default with intent to evade tax was therefore not established for invoking the extended limitation period.

Conclusion: The extended period of limitation was not invocable; the service-tax demand and the impugned order were set aside in favour of the assessee.

Issues: Whether reassessment jurisdiction could be sustained where no addition was made on the cash withdrawals and cash deposits forming the stated basis for reopening.

Analysis: Reassessment was initiated on information concerning specified cash withdrawals and deposits. The reassessment order instead estimated profit from the milk-trading business and made no addition concerning either transaction that formed the basis of the order under Section 148A(d) and notice under Section 148. The foundation for the belief of escaped income consequently did not survive, and reassessment could not be continued by shifting the inquiry to an unrelated estimation of business profit.

Conclusion: The reassessment proceedings were void ab initio and were quashed, in favour of the assessee.

Issues: Whether deduction allowed under Section 80-IB is to be reduced from business profits before computing deduction under Section 80-HHC.

Analysis: Section 80-IA(9) restricts deduction under other provisions of Chapter VI-A, Heading C, to the extent of profits already allowed as deduction under Section 80-IA; it does not require the deduction allowed under Section 80-IA or Section 80-IB to be reduced from gross total income while computing the deduction available under another provision. The computation was required to conform to the governing Supreme Court interpretation.

Conclusion: Deduction under Section 80-IB is not to be deducted from business profits before computing deduction under Section 80-HHC; the tax liability must be recomputed accordingly.

Issues: (i) Whether domestic sale prices could be used as CUP for benchmarking exports of water-based paints to an associated enterprise; (ii) Whether notional interest on delayed export receivables from an associated enterprise was to be benchmarked at domestic lending rates; (iii) Whether commission paid to employee-directors was disallowable under section 40(a)(ia); (iv) Whether the balance 50% of additional depreciation was allowable in the succeeding year where machinery was used for less than 180 days; (v) Whether DDT was restricted by the applicable DTAA rate; (vi) Whether unutilised Modvat/Cenvat credit could be added to closing stock under section 145A; (vii) Whether disallowance under section 14A read with Rule 8D required fresh determination.

Issue (i): Whether domestic sale prices could be used as CUP for benchmarking exports of water-based paints to an associated enterprise.

Analysis: CUP requires strict comparability. Domestic and export sales involve materially different geographical markets, commercial conditions, functions, risks and pricing factors. In the absence of comparable uncontrolled export transactions and adjustments for these differences, domestic prices could not validly be adopted as CUP. TNMM using contribution margin was accepted as the appropriate method.

Conclusion: The CUP-based transfer-pricing adjustment on export of water-based paints was deleted, in favour of the assessee.

Issue (ii): Whether notional interest on delayed export receivables from an associated enterprise was to be benchmarked at domestic lending rates.

Analysis: Delayed realisation of associated-enterprise receivables constitutes an international transaction. The applicable benchmark is LIBOR plus 100 basis points after allowing the appropriate credit period, rather than the domestic SBI lending rate.

Conclusion: The adjustment was remitted for recomputation at LIBOR plus 100 basis points after allowing the applicable credit period, partly in favour of the assessee.

Issue (iii): Whether commission paid to employee-directors was disallowable under section 40(a)(ia).

Analysis: The impugned provision related to commission/salary payable to the managing director and whole-time director, while a corresponding prior-year disallowance had been allowed on deduction and deposit of tax. The issue was governed by the earlier decision in the assessee's own case, and no distinguishing material was produced.

Conclusion: The sustained disallowance of commission was deleted, in favour of the assessee.

Issue (iv): Whether the balance 50% of additional depreciation was allowable in the succeeding year where machinery was used for less than 180 days.

Analysis: Where new plant and machinery eligible for additional depreciation is put to use for less than 180 days in the year of acquisition, only half the allowance is available in that year and the remaining half is allowable in the immediately succeeding year.

Conclusion: The balance additional depreciation was allowed and the disallowance was deleted, in favour of the assessee.

Issue (v): Whether DDT was restricted by the applicable DTAA rate.

Analysis: Divergent High Court views on treaty limitation of DDT were pending before the Supreme Court. Determination was therefore deferred to the Assessing Officer to apply the final binding outcome on the controversy.

Conclusion: The DDT issue was restored for fresh adjudication in accordance with the binding final judicial position.

Issue (vi): Whether unutilised Modvat/Cenvat credit could be added to closing stock under section 145A.

Analysis: The revenue failed to distinguish the earlier decision in the assessee's own case supporting the appellate deletion. No basis was established for interference with the deletion of the addition concerning unutilised credit.

Conclusion: The revenue's challenge to deletion of the unutilised Modvat/Cenvat credit addition failed, in favour of the assessee.

Issue (vii): Whether disallowance under section 14A read with Rule 8D required fresh determination.

Analysis: Interest disallowance is not warranted where investments yielding exempt income are demonstrably funded from sufficient own funds. Disallowance also depends on exempt income actually earned, though administrative expenditure may require examination. The assessee was entitled to present its working and relevant facts.

Conclusion: The section 14A disallowance was restored to the Assessing Officer for fresh examination, partly in favour of the assessee.

Final Conclusion: The transfer-pricing adjustments on export pricing and royalty, the commission disallowance and the additional-depreciation disallowance were deleted; the revenue's inventory-credit challenge failed; and the DDT and exempt-income expenditure matters require fresh adjudication on the stated legal parameters.

Issues: (i) Whether the Belgian investments and bank balances were undisclosed assets located outside India liable to tax; (ii) Whether the penalty founded on the addition could survive.

Issue (i): Whether the Belgian investments and bank balances were undisclosed assets located outside India liable to tax.

Analysis: An asset falls within the statutory definition only where no explanation of its source is offered or the explanation is unsatisfactory. The assessee's explanation that the assets originated from gifts received while resident in Belgium was supported by notarised declarations, banking material and evidence admitted in appeal. The donors subsequently confirmed the gifts on oath during Tribunal-directed verification. The verification report disclosed no material discrediting the donors, the transactions, or the stated source, and the Revenue produced no evidence that the assets represented undisclosed income earned or chargeable to tax in India. Initial suspicion could not persist as a substitute for evidence after the explanation was independently verified.

Conclusion: The foreign investments, bank balances and related transactions were not undisclosed foreign assets; the addition was deleted in full, in favour of the assessee.

Issue (ii): Whether the penalty founded on the addition could survive.

Analysis: The penalty was wholly founded on the quantum addition, which was deleted.

Conclusion: The penalty could not survive and was deleted in full, in favour of the assessee.

Final Conclusion: The assessee established the foreign source of the assets through verified gift evidence, removing the basis for both taxation of the assets and the connected penalty.

Ratio Decidendi: A foreign asset cannot be treated as undisclosed where the assessee's explanation of source is supported by verified evidence and the Revenue produces no material to disprove it.

Issues: (i) Whether the composite layout-development activities involving supply of goods and infrastructure works were classifiable as Site Formation and Clearance, Excavation, Earth Moving and Demolition Service or as Works Contract Service; (ii) Whether the extended period of limitation could be invoked; (iii) Whether the value of goods and materials used in the activity was excludible from the taxable value.

Issue (i): Whether the composite layout-development activities involving supply of goods and infrastructure works were classifiable as Site Formation and Clearance, Excavation, Earth Moving and Demolition Service or as Works Contract Service.

Analysis: The agreements required conversion of land use and provision of roads, drains, sewerage lines, borewells, reservoirs, water connections and other infrastructure. Property in goods used for these works was transferred and VAT was discharged under the composition scheme. The statutory definition and the Board clarification treated contracts subjected to VAT as works contracts for service-tax purposes. A composite contract involving goods and services could not be artificially classified under Site Formation Service where its essential character was execution of works involving construction and infrastructure development.

Conclusion: The activities are classifiable as Works Contract Service, in favour of the assessee.

Issue (ii): Whether the extended period of limitation could be invoked.

Analysis: Mere failure to disclose taxable activity or non-payment of tax does not establish wilful suppression. Invocation of the extended period required evidence of deliberate misstatement or suppression with intent to evade tax, which was absent.

Conclusion: The extended period of limitation was not invocable, in favour of the assessee.

Issue (iii): Whether the value of goods and materials used in the activity was excludible from the taxable value.

Analysis: Documentary material, including the Chartered Accountant's certification and VAT discharge, established use of goods and materials in executing the infrastructure works. The exemption for goods and materials sold by the service provider applied on production of documentary proof, and service tax was chargeable only on the service component.

Conclusion: The material-cost exclusion was allowable, in favour of the assessee.

Dissenting Opinion: The Member (Technical) considered the activity specifically classifiable as Site Formation Service, though the demand was confined to the normal period and the Revenue appeals on valuation were dismissed.

Final Conclusion: The composite layout-development contracts, involving taxable transfer of goods and infrastructure works, fall within the works-contract regime; the contrary classification and the resulting demands could not stand.

Ratio Decidendi: A composite contract involving transfer of property in goods on which VAT is paid and execution of infrastructure works must be classified as Works Contract Service and cannot be artificially vivisected for classification as Site Formation Service.

Issues: Whether disallowance of deduction under section 80GGC of the Income-tax Act, 1961, in respect of donation to a political party could be sustained merely on the allegation that the party was involved in providing bogus accommodation entries, without any material showing refund of donation or a direct nexus of benefit to the assessee.

Analysis: The assessee had claimed deduction for donation to a political party, and the assessment was reopened on information from the investigation wing alleging accommodation entries. The record did not disclose any evidence that the political party had taken commission, returned money to the assessee, or otherwise established a direct nexus between the alleged tainted party and any benefit derived by the assessee. On parity of facts with the cited coordinate bench decision, the adverse disallowance could not be maintained.

Conclusion: The disallowance of Rs. 1,00,000 under section 80GGC was deleted and the issue was decided in favour of the assessee.

Issues: Whether the addition made on account of alleged accommodation entries in the guise of bogus purchases could be sustained when the departmental portal information was uncorroborated and the alleged supplier denied any transaction with the assessee.

Analysis: The addition was founded only on information from the departmental Insight Portal. The assessee denied any transaction with the alleged supplier, and the notice under section 133(6) of the Income-tax Act, 1961 elicited a categorical denial from that supplier as well. No independent evidence such as purchase invoices, ledger accounts, bank trail, delivery documents, stock records, or incriminating material was brought on record to establish the existence of the alleged transaction. Mere information or suspicion could not substitute proof, and the Revenue failed to discharge the initial burden of establishing the foundational facts necessary to sustain the addition.

Conclusion: The addition was not sustainable and the deletion made by the first appellate authority was upheld.

Issues: Whether the disallowance under section 14A read with Rule 8D(2)(ii) of the Income Tax Rules, 1962, had to be recomputed by excluding investments in mutual funds and tax-free bonds from the value of investments for determining the indirect expenditure relatable to exempt income.

Analysis: The Tribunal held that Rule 8D(2)(ii) requires disallowance at 1% of the annual average of the monthly average of the opening and closing balances of the value of investments yielding exempt income, but accepted the assessee's contention that, on the facts, mutual funds and tax-free bonds should be excluded from the computation base. The Tribunal further directed verification by the jurisdictional Assessing Officer after giving the assessee a reasonable opportunity of hearing, and clarified that if the recomputed figure does not exceed the assessee's suo motu disallowance, no further disallowance is to be made.

Conclusion: The disallowance under Rule 8D(2)(ii) was directed to be recomputed excluding mutual funds and tax-free bonds, with relief limited to the extent indicated by the Tribunal.

Issues: (i) Whether the interest differential credited to the development funds could be treated as the assessee's income and the corresponding addition deleted. (ii) Whether the expenditure on promotional activities was allowable under section 36(1)(xii) of the Income-tax Act, 1961.

Issue (i): Whether the interest differential credited to the development funds could be treated as the assessee's income and the corresponding addition deleted.

Analysis: The assessee acted only as a nodal or implementing agency in respect of the funds held on behalf of the Government of India and the Reserve Bank of India. The amounts transferred to the specified development funds were retained and applied in accordance with directions issued for those funds, and the issue was already covered by earlier appellate orders in the assessee's own case. On that basis, the amount was held to be diverted at source and not taxable as the assessee's income.

Conclusion: The addition was rightly deleted and the Revenue failed on this issue.

Issue (ii): Whether the expenditure on promotional activities was allowable under section 36(1)(xii) of the Income-tax Act, 1961.

Analysis: The assessee had been notified for the purpose of section 36(1)(xii) with effect from financial year 2012-13, and the promotional and developmental activities were undertaken in furtherance of its statutory objects. Since the notification covered the relevant period, the expenditure was within the scope of the statutory allowance.

Conclusion: The disallowance was correctly deleted and the Revenue failed on this issue.

Final Conclusion: The appellate order deleting both additions was affirmed, and the Revenue's appeal was dismissed in full.

Ratio Decidendi: Amounts retained and transferred in accordance with directions governing statutory or governmental development funds are not taxable as the assessee's income where the assessee acts merely as a conduit or trustee, and expenditure qualifies under section 36(1)(xii) when incurred by a duly notified entity for the covered promotional purpose.

Issues: Whether deduction under Section 80HHC of the Income-tax Act, 1961 was required to be computed without reducing the deduction allowed under Section 80IB of the Income-tax Act, 1961 in view of Section 80IB(13) read with Section 80IA(9) of the Income-tax Act, 1961.

Analysis: The binding interpretation placed by the Supreme Court on Section 80IA(9) was applied. It was held that the restriction under that provision operates only to prevent double deduction under Chapter VI-A in respect of the same profits and gains, and does not require the deduction already allowed under Section 80IA or Section 80IB to be reduced from gross total income while computing another eligible deduction. On that basis, the deduction under Section 80HHC had to be worked out without first deducting the amount allowed under Section 80IB.

Conclusion: The issue was answered in favour of the assessee, and the deduction under Section 80HHC was held to be allowable without reducing the deduction under Section 80IB.

Final Conclusion: The appeal failed on the substantive computation question, the Tribunal's order was set aside, and the matter was sent back for fresh computation in accordance with the stated legal position.

Ratio Decidendi: Section 80IA(9) restricts double deduction under Chapter VI-A only to the extent of the profits already allowed under that provision and does not mandate reduction of such deduction from gross total income while computing another eligible deduction.

Issues: Whether the proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016 were vitiated for want of a separate guarantee deed on record and whether the appellant could still be treated as a personal guarantor to the corporate debtor.

Analysis: The appellant had signed the loan agreement and the guarantee-related document in the capacity of guarantor, and had not disputed the execution of the underlying transaction or his status as surety. The definition of "personal guarantor" under Section 5(22) of the Insolvency and Bankruptcy Code, 2016 requires an individual to be a surety in a contract of guarantee to a corporate debtor. The absence of a separately filed guarantee deed did not nullify the admitted guarantor relationship, particularly when the loan agreement itself recorded the appellant as guarantor and contained terms establishing the guarantee liability. The Tribunal treated the substance of the transaction as sufficient to establish the appellant's status and liability, and declined to adopt a hyper-technical view.

Conclusion: The initiation of proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016 was not vitiated, and the appellant was liable to be proceeded against as a personal guarantor.

Final Conclusion: The challenge to the admission of the personal guarantor insolvency proceedings failed, and the appeal was dismissed.

Ratio Decidendi: A separate guarantee deed is not indispensable where the borrower's loan documents, read with the admitted execution and guarantor designation, sufficiently establish the existence of a contract of guarantee and the individual's status as a personal guarantor.

Issues: Whether penalty under Section 117 of the Customs Act, 1962 could be sustained against the customs broker for alleged breach of Regulation 10(n) of the Customs Broker Licensing Regulations, 2018.

Analysis: Section 117 applies only where no express penalty is otherwise provided for the contravention or failure. The customs broker was proceeded against on the basis of alleged breach of the licensing regulations, which themselves provide the governing framework for such contraventions. The record also did not establish any fraudulent export activity by the appellant.

Conclusion: The penalty under Section 117 of the Customs Act, 1962 was not sustainable, and the appeals were allowed in favour of the appellant.

Issues: (i) Whether the amount paid by the appellant was proved to be a deposit made with the respondent company so as to attract Section 73(4) of the Companies Act, 2013; (ii) Whether the appeal survived after the respondent company entered corporate insolvency resolution process and the moratorium under the Insolvency and Bankruptcy Code, 2016 came into force.

Issue (i): Whether the amount paid by the appellant was proved to be a deposit made with the respondent company so as to attract Section 73(4) of the Companies Act, 2013.

Analysis: The appellant failed to discharge the burden of proving that the amount was credited to the respondent company's account as a deposit. The material on record showed that the money was credited to the account of Kerala Trade Centre, which was treated as a separate entity. The receipt and accounting entries relied upon by the respondent also indicated that the transaction related to the project entity rather than the respondent company itself.

Conclusion: The claim under Section 73(4) of the Companies Act, 2013 was not established against the respondent company, and dismissal of the company petition on that ground was justified.

Issue (ii): Whether the appeal survived after the respondent company entered corporate insolvency resolution process and the moratorium under the Insolvency and Bankruptcy Code, 2016 came into force.

Analysis: Once the respondent company was admitted into corporate insolvency resolution process, the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 barred continuation of proceedings. The overriding effect of Section 238 of the Insolvency and Bankruptcy Code, 2016 also operated, while the appellant's claim was left open to be pursued in the insolvency framework under Section 30(2) read with Section 53(1) of the Insolvency and Bankruptcy Code, 2016.

Conclusion: The appeal had become infructuous in view of the insolvency proceedings and moratorium.

Final Conclusion: The challenge to the dismissal of the company petition did not succeed, and the appellate proceedings were rendered infructuous by the subsequent commencement of insolvency proceedings against the respondent company.

Issues: Whether refund of accumulated Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 5/2006-C.E. (N.T.) dated 14.03.2006 could be denied on the ground that the services were not export of services, and whether such denial was sustainable when eligibility of credit had not been questioned under Rule 14 of the Cenvat Credit Rules, 2004.

Analysis: The dispute related to refund of unutilized Cenvat credit for exported output services. The Tribunal noted that the issue was already settled by earlier decisions holding that Rule 5 provides refund of accumulated credit where export is made, and that irregular availment of credit must be dealt with under Rule 14 of the Cenvat Credit Rules, 2004 by following the recovery mechanism under Section 11A of the Central Excise Act, 1944. It was also found that no notice had been issued to recover or deny the Cenvat credit itself, and therefore the refund could not be rejected by raising a ground outside the show-cause notice.

Conclusion: The denial of refund was unsustainable and the refund claim was held allowable in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeals were allowed with consequential relief as per law.

Ratio Decidendi: Refund under Rule 5 of the Cenvat Credit Rules, 2004 cannot be denied on grounds not forming part of the show-cause notice, and alleged irregular Cenvat credit must first be recovered under Rule 14 read with Section 11A of the Central Excise Act, 1944.

Issues: Whether penalties and liquidated damages recovered from suppliers and vendors for delayed delivery of goods or services constitute consideration for a declared service under Section 66E(e) of the Finance Act, 1994, so as to attract service tax.

Analysis: The recoveries arose from contractual clauses intended to compensate the innocent party for breach or default and were not consideration flowing from a consensual agreement to tolerate delay. Liability under Section 66E(e) requires a bilateral arrangement with consideration for refraining from an act, tolerating an act or situation, or doing an act. The contractual penalty mechanism is distinct from a service transaction and does not become taxable merely because damages are collected after breach. The issue was governed by binding precedent holding that liquidated damages, forfeiture of earnest money, and penalty amounts are not consideration for tolerating an act.

Conclusion: Such recoveries do not constitute consideration for a declared service under Section 66E(e) and are not liable to service tax.

Ratio Decidendi: Consideration for a declared service under Section 66E(e) must arise from a consensual agreement to refrain from an act, tolerate an act or situation, or do an act, and contractual damages or penalties recovered on breach are compensatory rather than consideration for service.

Issues: (i) Whether the delay of 107 days in filing the appeal could be condoned on the basis of the explanation offered by the assessee. (ii) Whether the estimation of income at 8% of turnover was justified, or whether the addition required restriction having regard to the assessee's audit report and past profit history.

Issue (i): Whether the delay of 107 days in filing the appeal could be condoned on the basis of the explanation offered by the assessee.

Analysis: The explanation showed that the delay arose from communication gap with the earlier representative, late receipt of records, and the time taken to engage the present representative. The delay was not attributable to deliberate inaction or neglect.

Conclusion: The delay was condoned.

Issue (ii): Whether the estimation of income at 8% of turnover was justified, or whether the addition required restriction having regard to the assessee's audit report and past profit history.

Analysis: The assessee had furnished certain materials including audit report and financial statements, and the past records showed net profit ranging between 2.04% and 2.38% of turnover. In these circumstances, estimation at 8% was found excessive, and the earlier profit pattern was treated as the proper guide for a fair estimation.

Conclusion: The addition was restricted by adopting net profit at 4% of the total turnover, resulting in partial relief to the assessee.

Final Conclusion: The appeal succeeded only in part, with the delay condoned and the assessed income reduced by adopting a lower profit rate.

Ratio Decidendi: Where the assessee's past disclosed profit margin and surrounding facts indicate that the revenue's estimated rate is excessive, the income may be reasonably estimated at a lower rate to meet the ends of justice.

Issues: Whether the assessment order and the subsequent penalty show-cause notices arising from reassessment proceedings deserved to be quashed with liberty to file a detailed response.

Analysis: The assessment was made after the show-cause notice under Section 148A(b) had proceeded on a narrower factual basis, while the later proceedings expanded the alleged deficiency without according commensurate opportunity to meet that basis. In the circumstances, limited interference was considered justified to enable the petitioner to place a detailed response and to ensure that the Assessing Officer thereafter decides the matter on due consideration of that response.

Conclusion: The assessment order and the consequent penalty show-cause notices were quashed in part, with liberty to the petitioner to file a detailed response within the time granted and with directions for fresh consideration by the Assessing Officer.

Issues: Whether the disallowance of purchases as non-genuine under section 37(1) of the Income-tax Act, 1961 was justified on the facts and evidence on record.

Analysis: The assessee produced purchase invoices, delivery challans, stock register, banking evidence of payment, GST returns, ledger account, and complete particulars of the supplier. The record also showed that the supplier had died, and the business had ceased thereafter. The alleged non-response from the supplier could not, in these circumstances, be treated as conclusive against the assessee. The revenue did not dispute the corresponding sales or point out any mismatch in the purchase vis-a -vis sales. Mere cancellation of GST registration, without more, was held insufficient to sustain the addition when the surrounding evidence supported the purchase transactions.

Conclusion: The disallowance of the purchase amount as non-genuine was held to be unsustainable and the addition was deleted in favour of the assessee.

Issues: (i) Whether the sampling of imported coal could be rejected for not following the procedure prescribed under IS 436, thereby denying the benefit of the exemption notifications; (ii) Whether the request for re-testing could be ignored despite mismatch between the load port test report and the laboratory test results.

Issue (i): Whether the sampling of imported coal could be rejected for not following the procedure prescribed under IS 436, thereby denying the benefit of the exemption notifications.

Analysis: The dispute arose in the context of provisional assessment under Section 18(1)(b) of the Customs Act, 1962 and the claim for exemption under Notification No. 21/2002-Cus. dated 01.03.2002 and Notification No. 20/2006-Cus. dated 01.03.2006. The sampling procedure had to conform to IS 436. In the absence of compliance with the prescribed method, the sample could not be treated as legally valid, and the test report based on such sampling could not be relied upon. The presence of the importer's representative at the time of sampling did not cure the illegality, as there can be no estoppel against law.

Conclusion: The sampling objection was rightly accepted and the Revenue's challenge to the rejection of the test report failed.

Issue (ii): Whether the request for re-testing could be ignored despite mismatch between the load port test report and the laboratory test results.

Analysis: Where the test report from the load port and the laboratory report do not match, a request for re-testing by an independent laboratory cannot be brushed aside without justification. The delay in seeking re-testing was explained by the late communication of the laboratory report, and the circumstances did not support treating the request as an afterthought. The demand for re-testing was therefore a relevant and valid basis for interference with the original test outcome.

Conclusion: The request for re-testing was rightly accepted and the Revenue's objection was rejected.

Final Conclusion: The appeal failed on all material grounds, and the order allowing the exemption benefit was sustained.

Ratio Decidendi: Where the prescribed sampling procedure is not followed, the resulting test report cannot be treated as legally reliable, and illegality in sampling is not cured by acquiescence or the mere presence of a representative; likewise, a credible mismatch in test results warrants consideration of re-testing.