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TMI Blog2008 (10) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... is, ONGC, Karaikkal under Pondicherry Administration. During the course of such transport, the vehicle was intercepted by Sales Tax Inspector, Sales Tax Check-post, Amaravila. He suspected the genuineness of the transport and detained the goods after issuing notice. The goods thereafter was released to the petitioner on furnishing bank guarantee. The Sales Tax Officer (Enquiry) after conducting an enquiry, has confirmed the proceedings initiated by the Sales Tax Inspector and also has confirmed the levy of penalty of Rs. 18,97,000. The petitioner being aggrieved by the said order has filed a statutory appeal before the Appellate Commissioner, Thiruvananthapuram, who after hearing the petitioner has rejected the claim of the petitioner that the transaction is one coming under section 5(2) of the CST Act and was not entitled for exemption. However, being of the opinion that the penalty levied is excessive, has reduced the penalty to Rs. 6,06,982. The petitioner, not being satisfied with the aforesaid order, has filed second appeal before the Sales Tax Appellate Tribunal in T.A. No. 643 of 1999. The Tribunal by its order dated November 2, 2001, while rejecting the tax claim of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 29(2) of the Act, and since the person in-charge of the goods vehicle did not tender those documents at Amaravila Checkpost, the authorities under the Act were justified in detaining the vehicle and imposing penalty under section 29A(4) of the Act, since there was an attempt to evade payment of tax due to the State. The undisputed facts are, the petitioner had procured purchase order from ONGC, Karaikkal for supply, installation and commissioning of telecommunication equipment. The petitioner has imported the telecommunication equipments from a foreign supplier and got it cleared from the Customs Department at Trivandrum, en route to Karaikkal. The goods were detained by the check-post authorities at Amaravila Check-post. It was the contention of the petitioner before the authorities under the Act and also before the Appellate Tribunal that there is no taxable event in the State of Kerala, as the transaction is coming under section 5(2) of the CST Act. The authorities have not accepted the claim of the petitioner and have levied penalty under section 29A(4) of the KGST Act, on the premise that there is no concluded sale and therefore, the benefit under section 5(2) of the CST A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th Nokia, Finland on July 1, 1997. Pursuant to this purchase order, Nokia Finland has supplied the ordered equipments under different invoices dated July 9, 1997. A comparison between the orders placed by the ONGC on BPL and BPL's order on Nokia Finland and Nokia's despatch clearly shows that there is an inextricable nexus between the transactions. It was the purchase order of ONGC that occasioned the import by BPL from Nokia, Finland. The goods being telecommunication equipment and to the specification of ONGC, it would not have been possible for BPL to divert the specific goods to any other customer. Moreover, the purchase order of ONGC stipulates import of goods from Nokia, Finland. This is evident from the annexure to the purchase order of ONGC. Annexure 1(b) of the purchase order of ONGC specifies the details of the list of imported items of bill of material furnished to facilitate making application for essentiality certificate to avail of concessional customs duty. Annexure 1(c) gives an idea of "make and model" of the equipment required to be imported from Nokia, Finland. The purchase order also specifies the value of imported items to be Rs. 7,55,89,999 (landing c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority has noticed that the contract between BPL and the foreign supplier terminates as and when the goods reach Thiruvananthapuram. In our view, just because BPL has taken delivery of the goods it does not follow that BPL can deliver the goods to any other customer. The purchase order of ONGC states that the details of list of imported items of bill of material is furnished to BPL in order to facilitate BPL to make application for the essentiality certificate to avail of concessional customs duty. Hence, it follows that though BPL has taken delivery of the goods, it is in pursuance to a contract for sale with ONGC. The second point raised is that, BPL is acting as the principal as far as the sale in question is concerned, and they are not mere agents of ONGC, the purchaser. In our view, the transaction in question is not whether BPL has acted as a principal or as an agent. The issue that requires to be considered is, whether the transaction in question has occasioned the criteria set out in section 5(2) of the CST Act, which can be deemed to have taken place in the course of import. The third point that was considered was, that there is no privity of contract between ONGC and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ler to go through a process of sourcing the goods and placing the order and all the risk and expenditure associated with it. It is to remove this difficulty, the term "deemed" appearing in section 5(2) makes it possible for one to engage another agency to do the import. As long as there is a link, such as the purchase order of the Indian buyer specifying that the goods have to be imported from the pre-determined foreign supplier, the goods imported and if it is completely in relation with the ultimate Indian buyer's purchase order, the transaction can be said to be one falling under section 5(2) of the CST Act. In the instant case, the import can be traced to the purchase order of ONGC and the purchase order specifies the quantity, model and other technical details. The imported goods answers all these requirements including the value of the goods imported being almost the same as the value mentioned in the purchase order of ONGC. The fact that the invoice number is defective and this has lead to the conclusion that, there is manipulation, is not sufficient to treat the transaction as not being in the course of import. The fact that the two customs document on record show that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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