DIPAK KUMAR SEN, J. - (1.) A . Tosh and Sons (P) Ltd., the assessee, carries on business in purchase and sale of tea. In its said business, the assessee exports tea to foreign countries. At the material time, the assessee entered into agreements with foreign Governments and foreign Government authorities being the U.S.S.R., Poland, the United Arab Republic and Iraq for export of tea. The respective agreements which were recorded in writing were not included in the paper-book though the same had been considered and construed by the authorities below. Copies of the said agreements were produced at the hearing without any objection from the Revenue and the same have been considered by us. The copies produced have been directed to be kept on the record. The agreement with the United Arab Republic was entered into by the assessee on April 19, 1971. In the said agreement, it was recorded that the total value of the drawback refund and any changes in the drawback rate was to be on the account of the Republic. A separate agreement was entered into by the assessee with the Arab Republic of Egypt, on September 28, 1972. It was recorded in the said agreement, inter alia, as follows: (a) The cost of tea would be in terms of the invoice of the brokers. 6 paise per kilogram of tea purchased would be the profit of the assessee. (b) All taxes, duties and levies, Central and State, would be on account of and payable by Egypt. (c) If and when any excise rebate would be received by the assessee from the Customs on exports, the same would be remitted to Egypt after obtaining approval from the Reserve Bank of India.
(2.) IN the agreement entered into with Iraq through the latter's Government Purchasing Board, it was recorded that the assessee would act as purchasing agent and contractor of the Government of Iraq. In cl. 8 of the Operation Schedule to the said agreement, it was recorded that the duties imposed by the Government of India would be paid by the assessee on account of the Government of Iraq. Differences in the rates of such duties would also be on account of the Government of Iraq and paid on the basis of the actual rate. Refund of duties and drawbacks allowed by the Government of India on export of tea would be to the credit of the Government of Iraq.
(3.) IN the agreement entered into by the assessee with the Government of Russia, it was recorded that the assessee would be entitled, apart from the actual cost for the tea exported, buying brokerage, commission and also a margin of profit at stipulated rates. It was further provided that the assessee would pass on to the Government of Russia benefits of rebate on excise duty receivable in respect of shipment of tea to Russia. The assessee, however, would be entitled to 4per cent of the rebate amount received for services rendered or expenses incurred in connection thereof.;