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TMI Blog2010 (4) TMI 991X X X X Extracts X X X X X X X X Extracts X X X X ..... The order of the court was made by K.L. MANJUNATH J.- The Revenue has come up in this revision petition being aggrieved by the order passed by the Karnataka Appellate Tribunal in S.T.A. No. 1706/2004 and S.T.A. No. 39/2005 dated March 29, 2007 raising the following substantial questions of law: (i) Whether the term and meaning extended territorial jurisdiction or territorial jurisdiction which is recognized by the international law can be considered while interpreting the provisions of the Sales Tax Act and if so to what extent? (ii) Whether in view of the facts and circumstances of this case, the absence of importer is an essential meaning of the word export ? (iii) Whether M/s. Air India Limited is a foreign company or a domestic company ? (iv) Whether in view of the facts and circumstances whether the Tribunal is right in allowing the appeal by holding that there is an export? We have heard the learned counsel for the parties. Before considering the arguments advanced by the learned counsel appearing for both the parties, we feel it appropriate to narrate the background of this case: The assessee is a public limited company registered as a deale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the claim of the assessee. She further contends that when Air India itself is not claiming the transaction as an export sale, the assessee being the seller of the goods cannot contend that the sale was in the course of export and such sale cannot be treated as an export sale in order to claim exemption of payment of Central sales tax. Therefore, she requests to answer the substantial questions of law in favour of the Revenue and against the assessee. She further contends that the Tribunal has committed a serious error in coming to the conclusion that the transaction between the assessee and Air India is in the course of export governed by section 5(1) of the Central Sales Tax Act. According to the Government advocate, the Tribunal has wrongly interpreted the provisions of section 5(1) of the CST Act. Per contra, the learned counsel appearing for the assessee contends that the Tribunal was justified in granting an order in favour of the assessee. According to him, Air India purchased the liquor from the assessee from Nanjangud and in terms of the contract the assessee is required to deliver the liquor crossing the customs frontiers in Bombay and when once Air India takes del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is situated within the territory of India. This fact is not in dispute. If it is to be treated as an export transaction, according to us, the buyer shall be of foreign origin. In this case, Air India cannot claim itself as a non-lndian company. Now the only point raised by the assessee is since the goods are delivered to Air India crossing the customs frontiers of India as defined under section 2(ab) of the CST Act, such transaction has to be treated as a sale in the course of export. In order to appreciate this fact it is useful for us to narrate the definition of section 2(ab) of the Central Sales Tax Act, which reads as hereunder: 2(ab) 'crossing the customs frontiers of India' means crossing the limits of the area of a customs station in which imported or exported goods are ordinarily kept before clearance by customs authorities. From this, it is clear that goods which are to be exported shall be kept crossing the limits of the area of a customs station. But as said earlier, Air India is not contending that the sale as an export sale. When a buyer is not a foreign buyer, according to us the transaction between the assessee and Air India cannot be treated as an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of India, can a transaction be held as sale during the course of export. According to us it attracts such a provision provided the first custom/business is attracted to the transaction in question. When Air India cannot be considered as an import buyer and the importer cannot be called an exporter even if the goods are stated in terms of the agreement crossing the customs frontiers limit, we are of the opinion that the transactions will not attract as a sale during the course or custom. It is also not in dispute that Air India is purchasing liquor from the assessee not to export the same to any other company, but it is for the use of its customers wherein liquor would be offered to its passengers. The passengers may be of Indian origin or foreign passengers. Therefore, it is not for an export business of Air India and in the circumstances, we are of the opinion that the purchase made by Air India from the assessee cannot be treated as purchase of goods by Air India for export. In the decision of the Madras High Court in M.R.K. Abdul Salam and Co. v. Government of Madras [1962] 13 STC 629 which reads as hereunder: We have now to deal with the question whether the sales to Go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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