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Issues: Whether the sales of imported furnace oil from the customs bonded warehouse, against agreements and bills of entry for home consumption, were sales in the course of import exempt under Section 5(2) of the Central Sales Tax Act, 1956, and whether the alleged insufficiency of stamp on the agreement defeated the claim for exemption.
Analysis: The sale was not treated as resting on the agreement alone, but on the bills of entry for home consumption and the invoices facilitating clearance of the goods. The goods remained in the import stream until they crossed the customs frontiers and were cleared from the bonded warehouse; import was held to be complete only when the goods crossed the customs barriers and became part of the mass of goods within the country. The Court also held that the objection based on want of proper stamp duty did not assist the Revenue, since an insufficiently stamped document is not automatically rendered unusable for all purposes and, in any event, the customs authorities had not impounded the document or required payment of duty and penalty before relying on it.
Conclusion: The transactions were held to be sales in the course of import and entitled to exemption under Section 5(2) of the Central Sales Tax Act, 1956. The Revenue's challenge failed, and the revisions were rejected.
Final Conclusion: The decision affirms that clearance from a bonded warehouse after filing bills of entry for home consumption does not by itself convert an import-linked transaction into a local sale, and stamp objections to the facilitating document did not dislodge the exemption claim on these facts.
Ratio Decidendi: For Section 5(2) of the Central Sales Tax Act, 1956, import is completed only when the goods cross the customs barriers, and a sale effected before that stage through transfer of title connected with clearance remains a sale in the course of import.
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