High sea sale exemption can be proved by contemporaneous documents, not only an endorsed bill of lading.

High sea sale exemption may be supported by contemporaneous documents other than an endorsed bill of lading, because endorsement is only one mode of proving transfer of documents of title before goods cross the customs frontier. Where the genuineness of other materials is not disputed, they must be examined to determine whether the import-sale transaction is proved. Rejection of the claim solely for non-production of an endorsed bill of lading is therefore incomplete, and the assessing authority must reassess the exemption claim on the full documentary record. Payment of tax by the buyer does not, by itself, discharge the claimant's burden to establish entitlement to exemption.

---

---

Issues: Whether exemption could be denied on alleged high sea sales merely because the endorsed bill of lading was not produced, and whether the matter required reconsideration on the basis of other contemporaneous materials.

Analysis: The operative question was whether a sale in the course of import had been proved by transfer of documents of title before the goods crossed the customs frontiers. The Court noted that endorsement on the bill of lading is only one mode of proof and not the only mode, and that other contemporaneous documents may establish the transaction if their genuineness is not in dispute. On the facts, the authorities had rejected the claim mainly for want of an endorsed bill of lading, without properly examining the other materials produced. The Court also held that the fact that the purchasers may have paid tax did not by itself absolve the assessee from proving entitlement to exemption.

Conclusion: The assessment could not be sustained on the present record, and the matter was required to be remitted to the assessing authority for fresh examination of the documents and the claim of high sea sale exemption.

Ratio Decidendi: High sea sales may be proved by contemporaneous evidence other than an endorsed bill of lading, because endorsement is only one mode of proof and not a legal prerequisite where other reliable materials establish transfer of documents of title in the course of import.

---