9911796707
TMI Blog2006 (8) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... s entered into by the petitioner with M/s. P.T. Krakatav Steel (PTKS) for import of sponge iron for distribution to the mini-steel plants in the country. As a matter of fact, two contracts were entered into by the petitioner, one for import of 30,000 tonnes, an additional quantity of 50,000 tonnes was added and another contract for import of 3,00,000 tonnes. In order to facilitate import of sponge iron, import licence was issued to the petitioner in which it was stated that the imported goods shall be distributed by the licensee to the actual users . In October, 1980, the Government of India vide notification, dated October 22, 1980 nominated the petitioner as the canalising agents. According to the petitioner, mini-steel plants were re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected by transfer of documents of title to the goods before they crossed the customs frontier of India. Alternatively, it was contended that the sale which occasioned was in the course of import of goods. Therefore the sale covering the disputed turnovers shall be deemed to have taken place in the course of import and as such they were exempt from sales tax in view of section 5(2) of the Central Sales Tax Act and section 38 of the Andhra Pradesh General Sales Tax Act read with article 286(1)(b) of the Constitution of India. These contentions were rejected by the sales tax authority and also by the Tribunal. The revision is filed accordingly. Before the revision is considered, it would be appropriate to have a look at section 22 of the Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering the disputed turnover and copies of agreements entered into by actual users appointing MSS SIA Ltd., as agent for purposes of clearing and forwarding the goods to the user's factory. The finding of the Tribunal was: The appellant had led no evidence regarding when the contracting parties, i.e., appellant and the actual users intended the transfer of property in goods to take place. Counsel for the appellant placed undue importance on delivery of one set of shipping documents to a mere clearing agent. And in fact the terms of invoice raised by the appellant against the actual users run contrary to the claim of 'high-seas sales' as discussed above. In the circumstance, the claim of high-seas sales has to be held as not s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttance of foreign exchange against the said licence to the extent of value specified therein. The import licence expressly contained two conditions, (i) that the goods imported will be the property of the licence-holder at the time of clearance through the customs and (ii) that the goods will be utilised only for consumption as raw material or accessories in the licence-holder's factory and that no portion thereof will be sold to or be permitted to be utilised by any other party. Reading these two documents together it was clear that the import of the goods by the respondent-assessee was for and on behalf of the local purchaser and the respondent-assessee could not, without committing a breach of the contract, divert the goods so import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for consumption as raw material or accessories in the licenceholder's factory and that no portion thereof will be sold to or be permitted to be utilised by any other party. Because of these two conditions, the Supreme Court came to the conclusion that the respondent-assessee was importing goods for and on behalf of local purchaser and the respondentassessee could not, without committing a breach of the contract, divert the goods so imported for any other purpose. Therefore, the Supreme Court found that there was an integral connection or inextricable link between the sale and the actual import or export in order that the sale could become a sale in the course of import. On facts the petitioner has failed to establish such a link. Wher ..... X X X X Extracts X X X X X X X X Extracts X X X X
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