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TMI Blog2001 (1) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... xport sales. But, when the accounts were rechecked, it was found that the assessee did not effect any export of staple fibre yarn for the abovesaid turnover, but had sold the yarn to registered exporters-M/s. Yarn Syndicate Ltd., and Keshavlal Talakchand, Bombay, and they were not entitled to claim exemption as they did not export the yarn. Therefore, notice was issued to the assessee proposing to levy tax on a turnover of Rs. 17,08,500. The assessee, while filing the objections, admitted the liability on a turnover of Rs. 8,02,500 under the Central Sales Tax Act, 1956 as the goods were despatched to Bombay under "C" forms and "C" form also was produced. So, the assessees offered to pay tax under the Central Sales Tax Act for the turnover o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had offered to pay tax under the Central Sales Tax Act for a turnover of Rs. 8,02,500 as the goods had moved from Tamil Nadu to Maharashtra under "C" form. With regard to the disputed turnover for which exemption is claimed on export sales, the admitted facts are that the yarn was sold by the appellant-M/s. Premier Mills Ltd., to registered exporter, M/s. Yarn Syndicate Limited for a turnover of Rs. 9,06,000. The exporter subsequently exported the yarn to Japan under an agreement with a foreign buyer in Japan. The appellantMills had nothing to do with the foreign buyer in Japan and there was no privity of contract between the appellant and the foreign buyer. The transaction was only between the appellants and the inland purchaser-M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on on export sales. This argument is countered by the learned Senior Standing Counsel Thiru Venkateswaran who contends that when the appellant-assessee has no privity of contract with the foreign buyer, the transfer of the documents of title to the goods for sale to foreign buyer, either before the export or after the export, has no relevance because the appellant-assessee who is a third party to the foreign buyer and as the appellants' obligations were only to the exporter and not against the foreign buyer and similarly, the foreign buyer had no claim of any right against the appellants but their claim was only against the exporter there was no export sale made by the appellant. The contract between the appellants and the exporter and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o its contract with the foreign buyer entered into a contract with the appellant to procure the goods. Such contracts for procurement of goods for export are described in commercial parlance as back to back contracts. In export trade it is not unnatural to find a string of contracts for export of goods. It is only the contract which occasions the export of goods which will be entitled to exemption. The appellant was under no contractual obligation to the foreign buyer either directly or indirectly. The rights of the appellant were against the Corporation. Similarly the obligations of the appellant were to the Corporation. The foreign buyer could not claim any right against the appellant nor did the appellant have any obligation to the forei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee after the goods had crossed the customs frontiers of India, it would be a sale in the course of export. The case relied upon by the learned counsel for the appellant, has different facts. In that case, one Wilson and Company was acting on behalf of their overseas principals and negotiated with the dealer therein. The bills of lading for the goods were taken by the dealers in the name of Wilson and Company and payments were made from the dealer's account by the bank on presentation of the bills of lading along with the invoices. It was held in that case that as the transfer of documents of title to the goods took place only after the ship had crossed the customs frontiers, the sale was in the course of export exempted fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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