TaxTMI 
TaxTMI 
1990 (1) TMI 282
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....ave included the customs duties so paid in the sale price of the goods. This is disputed by the applicant. The Tribunal has, therefore, referred the following question to us under section 61(1) of the Bombay Sales Tax Act as a common question in all the references: "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the customs duty paid by the applicant's buyer-customer formed part of the sale price of the imported goods sold by the applicant to its customer for the purpose of the Bombay Sales Tax Act, 1959, and for the purpose of the Central Sales Tax Act, 1956?" 3.. The applicants initially contended before the sales tax authorities that the sales were in the course of import. But this contention was not pressed. They submit that in view of the terms of the contract of sale, customs duties paid by their buyers cannot be included in the sale price. 4.. The contract of sale is in the form of a letter from the applicants to their buyers. Clauses 1, 2, 3, 5, 7 and 8 of the contract are as follows: 1.. Value: We offer you Hexamine to the extent of c.i.f. value Rs. 1,40,000 against import licences. 2.. C....
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....ealer for any sale made including any sum charged for anything done by the dealer in respect of goods at the time of or before delivery thereof...............". The definitions of these terms under the Central Sales Tax Act are similar. 7.. Sale price therefore means the amount of valuable consideration for a sale. It includes sums charged for anything done by the dealer in respect of the goods at the time of or before delivery. The contracts in the present case are c.i.f. contracts. The transaction of sale was complete on payment by the buyer of valuable consideration as per clauses I and 2 of the contract and delivery of the documents to the buyer. The customs duty was paid by the buyer after completion of sale, i.e., at a time when they were the owners of the goods. Ordinarily in these circumstances, customs duty cannot be included in the price of the goods purchased prior to customs clearance. 8.. In the case of Mahabir Commercial Co. Ltd. v. Commissioner of Income-tax, West Bengal reported in [1972] 86 ITR 417, the Supreme Court has observed that under the c.i.f. contract prima facie the property in the goods passes once the documents are tendered by the seller to the bu....
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....umption, includes any owner or any person holding himself out to be the importer." In the present case the buyers were the owners of the goods at the time when the goods were cleared for home consumption. The buyers were therefore importers within the definition of "importer" under the Customs Act. 11.. As "importers ", buyers were liable to pay customs duties. Under section 12 of the Customs Act, duties of customs are leviable on goods imported into or exported from India. Under section 46, the importer of any goods shall make an entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed form. Under section 17 of the Customs Act, after an importer has entered any imported goods under section 46, the imported goods may, without undue delay be examined and tested by the proper officer and assessed. Customs duties are, therefore, payable by an importer which includes the owner of the goods. 12.. As per the prescribed form of the bill of entry, the importer is also required to give a declaration, inter alia, that the particulars in the bill of entry are correct and the contents of the packages are as per the bill of la....
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....paid by the purchasers did not go into the common till of the sellers and did not become a part of their circulating capital. 14.. These observations of the Supreme Court were considered as not a decisive basis for determining whether such duties would form a part of the turnover of sales or not by the Supreme Court in the second McDowell Company case (McDowell & Company Limited v. Commercial Tax Officer, reported in [1985] 59 STC 277 at page 293). During the period relevant to the second McDowell case [1985] 59 STC 277 (SC), however, the Andhra Pradesh Distillery Rules had been amended in 1981. Under the amended rules the payment of excise duty was the primary and exclusive obligation of the manufacturer. The Supreme Court, therefore, held that if payment of excise duty is made under a contract or arrangement by any other person it would amount to meeting of the obligation of the manufacturer by that person and nothing more. Payment by the purchaser was therefore held to be on account of the manufacturer. Excise duty was therefore held as a part of the price of the goods in question. 15.. In the present case the provisions of the Customs Act cast the liability for payment of....