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TMI Blog1977 (10) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... nsactions between the appellants and the customers was entirely different from the transactions between foreign supplier and the appellants and therefore the sale by the appellants was a local sale after the import of the goods into the country. He therefore, levied tax at the rate of 15 per cent single point under item 1 of the First Schedule to the Act. The first appeal before the AAC (Commercial Tax) III, Madras City was not successful. Hence, the present appeal before us disputing the assessment on the turnover of Rs. 1,59,477.00. Tribunal Appeal No. 517/77: In 1975-76, the appellants reported a total turnover of Rs. 4,24,141.74 and taxable turnover of Rs. 69,084.37. The Joint CTO, Numgambakkam Asstt. Circle, found the total sales to be Rs. 2,66,085.00 He determined the taxable turn over at Rs. 2,66,085.00 This turnover included a sum of Rs. 1,97,000 representing sales of imported machines to Tvl. Hotel Sudersan International, Madras. Here also, the claim of the assessee was that the sales were in the course of import and not liable to tax. But the AO disallowed the claim on the ground that the appellants sold the goods after the import of the goods into the country. The fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and produced the original in respect of 1975-76. The learned State Representative relied on the orders of the lower authorities. He contended that according to the import licence and the letter of authority, the appellants have to act as agents of the import licence holder. But in the present case, they had acted as buyers from the foreign suppliers and as sellers to the licence holder and therefore the conditions in the import licence have not been strictly followed. He also pointed out that in the decision in CST vs. Metal Distributors Ltd. 39 STC at 212, the assessee acted as an agent and charged only commission to the buyers and hence such transaction was treated as eligible for exemption. But in the present case, the appellants made outright purchases and sales and therefore on exemption would be applicable. 5. We have considered the arguments of both sides and perused the records made available. Tvl. Savera Hotels (P) Ltd., obtained import licence No. 1375339 on 5th Dec., 1972 for importing one number of "Gust Billing Machine N.C.R. 42" and 4 Nos. of "N.C.R. Cash Receipting Machines". They also obtained a letter of authority in favour of the appellants to import the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the other case, Tvl. Hotel Sudarsan International, Madras, obtained import licence No. 1397931 on 23rd Feb., 1974 for importing NCR Machines. They also obtained a letter of authority in favour of the appellants for importing the goods on their behalf and to make all other arrangements in respect of this import. This letter of authority also contains the same conditions as detailed in the earlier paragraph relating to Tvl. Savera Hotels (P) Ltd. The appellants procured purchase orders from Tvl. Hotel Sudarsan International, Madras. They placed an order on N.C.R. Manufacturing Ltd., Dundee, Scotland for 1 No. N.C.R. 32 accounting machine on 10th Aug., 1974, another order for 1 No. NCR 42. Accounting Machine, on NCR Co., Dayton, Ohio. In these indents, the name of the customers and the import licence particulars were reported to the Principals. Instructions for the building of the machines were also sent to the foreign principals. The foreign suppliers manufactured the machines as per the requirement and shipped the goods to the appellants on 31st Dec., 1974 and 14th March, 1975 respectively. In all the shipping documents as well as in the foreign invoice there is reference to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct with the foreign seller was only by the assessee and the order is placed only in the name of the assessee and the import was also effected in the name of the assessee. If the purchasers were holding the import licence and the assessee had helped them in importing the goods as in the case of Dy. CIT vs. Kotak Co. the position would have been different." Thus as late as November, 1975, the High Court considered that the decision in 32 STC p.6 was holding the filed in respect of sales by letter of authority holder to the licence holder. The facts in Binani s case and Kotak s case were different and the former case where the import licence holder sold the goods to third party cannot be applied to the sales made by the letter of authority holder to the import licence holder. 8. In Tribunal Appeal Numbers 492, 546 and 547/76, dt. 26th Nov., 1976 relating to the case of IBM World Trade Corporation (1977) TTJ 953 relating to Imkemex India Ltd., this Tribunal considered the liability of similar letter of authority holders who have imported the goods and supplied them to the respective import licence holders and held that the transactions were similar to those in Kotak Co. case and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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