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TMI Blog2007 (1) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... tside the country. During the course of assessment proceeding, the dealers claimed that the dispatches of the goods to Bombay party were in the course of export and were not in the course of inter-State sales. The assessing authority had not accepted the plea of the dealers and treated the dispatches of the goods to the Bombay party as inter-State sales. First appeals filed by the dealers were rejected. Dealers filed second appeals before the Tribunal, which were allowed and the dispatches of the goods to Bombay party have been treated as being in the course of export. It has been held that the movement of the goods were occasioned in pursuance of orders of export. Heard Sri B.K. Pandey, learned Standing Counsel and Sri Bharatji Agrawal, learned Senior Advocate appearing on behalf of the dealers. Learned Standing Counsel submitted that the Bombay party had obtained the export orders in its own name and had exported the goods in its own name. Goods were dispatched by the dealers to the Bombay party and there was nothing to suggest that at the time of the dispatch of the goods it was specified that the same goods would be exported to a particular party. There was no contract betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b General Mfg. Works, Krishna Nagar, Mathura. 2. M/s. Lal Industrial Corpn. do. 3. M/s. Elite Metal Products. do. 4. M/s. Hindustan Metal Products. do. 5. M/s. Shiv General Industries. do. 6. M/s. Kayson Metallic Corpn. do. 7. M/s. Ashoka General Industries. do. Carrying on the business of manufacturing taps and water fittings at Krishna Nagar, Mathura, under L & K Group as trade mark, having branches of serial Nos. 1, 2, 3 and 4 at Delhi and Bombay, hereinafter called the "principals" of the second part. 2.. Whereas aforesaid 7 manufacturers of the second part having agreed amongst themselves, form a group in collaboration with M/s. Eastern Oceanic, for export of taps and water fittings outside India. The company was formed styled as M/s. Eastern Oceanic, and was duly registered under the Indian Partnership Act. Vide certificate of registration No. B. 82507, dated August 2, 1972 issued by the Registrar of Firms, Bombay, Government of Maharashtra at Bombay, and whereas the company registered under the Indian Partnership Act is a legal body, having correlation with the principals. 3.. Whereas due to difficulties involved in export procedure the principals of the second p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the company agents could transfer and pledge all such documents and title deeds of the goods for obtaining advances and loans from the bankers or any other agency, and the agents will be entitled to receive payments of all bills so made by them in their own name to the foreign buyers or otherwise. 9.. That the agents could in their turn appoint agents such as bankers or shipping and clearing agents, etc., to do all acts to perform all deeds for proper conduct of their business and their acts will be as binding on the principals as on the agents themselves. In the instant case Shri K.L. Agrawal, the managing partner of the Eastern Oceanic shall exercise the powers in the capacity of "Attorney" throughout on behalf of the principals, jointly or several. 10.. That the principals agree that the agents shall be entitled to deduct from the price received from the foreign buyers such amount as might be agreed upon between the agents and the principals, from time to time for their commission and remuneration of the services and expenses incurred by them on behalf of the principals as well as their own overhead charges out of the sale price of each particular type of the art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property of the company agent. The material shall remain in custody of the principals just as manufacturing agent of the agents. 17.. That the expression "company" or "agents" and the "principals" herein used, shall be given the widest meaning and scope and unless inconsistent with the context, include the agents' representatives, successors and the assignees of the parties. 18.. That this agreement is made for a period of three years in the first instance from the date of execution of the agreement, subject to the termination at the option of either party in writing. 19.. That all sorts of disputes of differences or whatever nature they may be, between the parties, which may arise with regard to the construction, meaning and effect of this deed or any part thereof and in respect of any sales, indent or supply under this deed, or prior to it, or any other matter in relation to transactions and supplies, arising from it or concerning it, it will be decided by the Sole Arbitration or Shri Brij Bhushan Lal, despite the fact that he is one of the partners of the agent concern as well as one of the parties of the principals concern, or otherwise int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between Indian manufacturer and the Indian exporter and the other between the Indian exporter and the foreign buyer. While in the present case, there is no contract of sale between the assessee/appellant and the Indian exporter of M/s. Eastern Oceanic, Bombay, but there was relation of principal and agent between them and not that of vender and vendee. Same view has been taken by the honourable Supreme Court in the case of Mod. Serajuddin [1975] 36 STC 136 where the honourable Judges have observed that there was no principal and agent relationship between the appellant and the corporation and in the absence of such relationship agency of necessity did not arise. The relationship between the appellant and the corporation was between two principals and there was no aspect whatsoever of principal and agent. This observation is much more important in view of the fact that there is no dispute over the fact that in view of the admitted agreement the relationship among the assessee/appellants and M/s. Eastern Oceanic was that of the principal and agent. The honourable Supreme Court has held in the case of Ben Gorm Nilgiri Plantations Co., reported in [1964] 15 STC 753 that: 'Where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t inter-State sales to the Bombay party. The decision of the apex court in the case of Mod. Serajuddin v. State of Orissa [1975] 36 STC 136 has been distinguished on the ground that it was not the case of agency but it was the case of sale by Serajuddin to State Trading Corporation on principal to principal basis. Have heard learned counsel for the parties and perused the order of the Tribunal and the authorities below. The decision of the Constitution Bench of the apex court in the case of Mod. Serajuddin v. State of Orissa [1975] 36 STC 136 is not applicable to the present case. In that case there was sale by Serajuddin to the State Trading Corporation and, thereafter, there was export by State Trading Corporation to the foreign buyers. In the absence of any privity of contract between Serajuddin and the foreign buyers it has been held that the goods were not occasioned in the course of export. Apex court, on the facts and circumstances of the case, has also held that the transactions between the Serajuddin and State Trading Corporation was on principal to principal basis and State Trading Corporation had not acted as an agent of Serajuddin. In the present case Bombay party ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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