9911796707
TMI Blog1981 (7) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... ged in the manufacture of paper and allied products in Pallipalayam, Erode, in the State of Tamil Nadu. Its registered office is also at Pallipalayam, Erode. A firm of exporters called International Markets, New Delhi, were acting as agents of certain commercial houses in Iran. During the relevant year this firm entered into as many as six transactions with the assesseecompany under which the assessee-company was to sell paper at prices f.o.b. Madras but deliverable at Cochin Port for being carried by sea to parties in Iran. The goods were actually transported from the assessee's factory to Cochin Port in Kerala State. The assessing authority as well as the appellate authorities rejected the assessee's claim that the sales were in the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42.18 now in question in this revision. The Tribunal has recorded a finding, agreeing with the assessing authority and the Appellate Assistant Commissioner, that the sales cannot be regarded as sales in the course of export, although the sales were undoubtedly meant for export to parties in Iran. The Tribunal found that the contracts of sale were only between the assessee, on the one hand, and International Markets, on the other. There were in turn, separate and independent sale contracts between International Markets and the Iranian buyers. The Tribunal found, on a consideration of the documentary evidence in the case, that the property in the goods passed from the assessee-company to International Markets when the assessee delivered the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia to Iran. When the assessee undertook the responsibility of shipping the goods to Iran, it did so, not in the role of a seller of the goods, but in the role of a forwarding agent acting for and at the behest of International Markets. The bill of lading clearly declared that the assessee was acting only for and on behalf of International Markets, in consigning the goods for shipment. Over and above these considerations, was the utter absence of any contract, or even contact, between the assessee and the Iranian concerns. It would, therefore, be opposed to facts to say that what occasioned the export of goods out of India were sales by the assessee to International Markets. The truth is that it was International Markets which put the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the factual local sale. With such a factual local sale it would not be open to the assessee to argue that it must nevertheless be regarded as a sale in the course of export, merely for the reason that it can be pushed into the second part of section 5(1) and somehow treated as a sale by transfer of shipping documents while the goods were on the high seas. In other words, if the sale is only a factual local sale, the second part of section 5(1) cannot have any application at all. The learned counsel submitted that it is enough that a transaction is capable of being brought within the words of the statutory fiction in section 5(1) and if those words aptly applied to the transaction, then whatever may be the factual position the fiction must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid that there has been a transfer of documents of title to the goods which would bring the transaction within the meaning of the second part of section 5(1) of the Act. It may be that the ship carrying the goods in question had already left the shores of India and had crossed the customs frontiers by the time the assessee had transferred the documents of title to the bank for being delivered over to International Markets at New Delhi. The act of making out documents of title, such for instance, as the invoice or even a bill of lading, cannot be regarded as a transfer of title, much less can the act of delivery of those documents by the assessee to the local branch of the Delhi bank be regarded in any sense as a transfer of documents of tit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'this part of the case put forward by the assessee's learned counsel, we agree with the conclusion reached by the Tribunal. The learned counsel referred in the course of his argument to a decision of a Bench of this Court in Deputy Commissioner (CT), Coimbatore v. Salem Magnesile (P.) Ltd. [1978] 42 STC 285. This decision, however, is basically different on facts. In that case, a local agent of a foreign concern entered into a transaction of purchase for certain goods from a dealer in calcined magnesite in Salem. The terms of the contract in regard to the supply of these goods were rendered in writing or, at any rate, could be ascertained by an examination of two letters between the parties. One of the terms of the bargain between the part ..... X X X X Extracts X X X X X X X X Extracts X X X X
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