TaxTMI 
TaxTMI 
2010 (6) TMI 739
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.... Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in taking a stand different from that taken by the Division Bench of the Tribunal and refusing to refer the issue of insurance charges to a Larger Bench for decision, on the ground that 'had the documentary evidence been placed before the Division Bench, the Division Bench would have come to a different conclusion' when the Division Bench has based its decision only on the interpretation of statutory definition of 'sale price' as contained in clause (b) of section 2 of the Central Sales Tax Act, 1956, and has nowhere in its judgment stated that its decision in respect of insurance charges is on account of non-production of any documentary evidence?" The facts: 3. The respondent, M/s. Kolsites Industries, is a reseller in machinery and is duly registered under the BST Act as well as under the Central Sales Tax Act, 1956 ("the CST Act", for short). The respondent was assessed by the assessing authority and vide assessment orders passed under the BST Act and the CST Act for the period from July 1, 1982 to June 30, 1983 and from July 1, 1985 to June 30, 1986 raised dues of R....
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....f law seeking decision of this court. Submissions: 7. At the outset, Mr. Sonpal, the learned advocate appearing for the Revenue submitted that the term "sale price" is defined in section 2(h) of the CST Act, as follows: "'Sale price' means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or delivery or the cost of installation in cases where such cost is separately charged." 8. Mr. Sonpal submitted that though it is clear from the above definition that the cost of freight, delivery and the cost of installation are excluded from "sale price", the insurance charges are not so excluded and, therefore, any claim seeking deduction of insurance charges from "sale price" is not tenable. Mr. Sonpal further submitted that the definition of 'sale price' is ". . . inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery the....
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....d advocate for the respondent has submitted that the Tribunal has noted the following facts as emerging from documents produced by the respondent, i.e., the agreement, marine cover note, quotation and invoice. Agreement: (i) The price of machinery quoted is based on level of price prevailing on the date of agreement and unless otherwise agreed, the quoted price is exclusive of charges payable of packing, carriage, freight and insurance. (ii) The buyer shall not be entitled to take delivery of goods unless the entire balance amount is paid to the company. (iii) The delivery of machinery is to be taken at the works of the company, i.e., the respondent herein. However, if the machinery is desired to be delivered at a particular site, the same can be arranged at the discretion of the company at the buyers' risk and cost. (iv) The respondent cannot accept the responsibility of damage or delay during the transit unless specifically agreed in writing to cover such risk by insurance. (v) The respondent may cover insurance on buyers instructions at an extra costs payable in advance by the buyer. Marine cover note: (vi) Marine cover note shows that the amount deposited by the dea....
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....Ltd. reported in [1995] 99 STC 101 (Bom). By this judgment, the Division Bench of this court, after referring to various judgments of the honourable Supreme Court in Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13 (SC), Ramco Cement Distribution Co. Pvt. Ltd. v. State of Tamil Nadu [1993] 88 STC 151 (SC) and Hyderabad Asbestos Cement Products Ltd. v. State of Andhra Pradesh [1969] 24 STC 487 (SC), has clearly distinguished the f.o. r. contracts destination railway station and the contracts which are not f.o.r. destination railway station but only the price is stipulated on that basis. Paragraph 6 of the said judgment on which reliance is placed reads thus (pages 105 and 106 in 99 STC): "6. F.o.r. contracts may be of two types. First, it may be a contract of sale f.o.r. destination railway station. Second, it may not be a contract of sale f.o.r. destination railway station, but price alone may be so. In the first type of f.o.r. contracts, the seller undertakes an obligation to put the goods on rail and arrange to have them carried to the destination railway station at his expense. The delivery of the goods to the purchaser in such a case is complete at the destina....
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.... of reimbursement of the freight which was payable by the purchaser but in fact disbursed by the seller and hence it would not form part of the sale price." It is therefore submitted that in the instant case, the Tribunal, considering the documentary evidence placed by the respondent, came to the correct conclusion that the insurance is not intended to be part of the sale price and insurance charges have to be borne by the buyers independently and separately and such insurance charges are not to be included in the sale price. 16. It is submitted that the decision of the honourable Supreme Court in Hindustan Sugar Mills' case [1979] 43 STC 13 (SC) relied upon by the applicant has been distinguished in the said decision of the Division Bench of this court as can be seen from paragraphs 8, 9 and 10 of the said decision, which are reproduced hereunder (pages 107 and 108 in 99 STC): "8. In Hindustan Sugar Mills Ltd. case [1979] 43 STC 13 (SC), the Supreme Court reiterated and reaffirmed the ratio of its earlier decision in Hyderabad Asbestos Cement Products Ltd. [1969] 24 STC 487 (SC) but arrived at a different conclusion in view of the provisions of the Control Order governing t....
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....respondent also relied on the decision of the Madras High Court in Seshasayee Industries Limited v. State of Tamil Nadu [1994] 92 STC 565 (Mad) and the decisions of the Allahabad High Court in Commissioner, Trade Tax, U. P., Lucknow v. Indian Aluminium Cable Co. Ltd. [1999] 115 STC 444 (All) and Hyderabad Asbestos Cement Products v. Commissioner of Sales Tax [1999] 114 STC 564 (All), wherein it is held that if insurance charges are charged separately, the same are not liable to be included in the taxable turnover of the dealer. 18. The learned advocate appearing for the respondent has further submitted that the honourable Supreme Court has, in the case of Commissioner of Income-tax v. Brij Lal Lohia and Mahabir Prasad Khemka [1972] 84 ITR 273(SC) held that the Tribunal, on the basis of the evidence, can take a different view in the later assessment years. In the instant case too, the Tribunal, on the basis of the documentary evidence produced by the respondent for the assessment years in question, has taken a different view than the view taken earlier. It is therefore submitted on behalf of the respondent that the decision of the Tribunal dated October 5, 1996 in the second appeal....
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....ontract." The specimen sale invoice produced by the respondent shows that in addition to the price of spares, excise duty and packing charges are added and on the total amount, Central sales tax is charged at the rate of four per cent against C form. Loading charges and the insurance charges are shown separately. 23. The aforesaid terms in the documents clearly reveal that the delivery of the goods was to be effected by the respondent to the buyers ex-works and the respondent had not taken any risk upon themselves qua the goods upon delivery. The respondent, in no uncertain terms, clarified in the agreement that unless otherwise agreed, the quoted price is exclusive of the charges payable of packing, carriage, freight and insurance. There is no material to show that there was any agreement to the effect that the quoted price is inclusive of insurance. It is also categorically agreed that the delivery of the equipment/machinery is to be taken at the works of the company. However, if the equipment/machinery is desired to be delivered at a particular site, the same can be arranged at the discretion of the respondent at the buyers cost and risk, irrespective of which the delivery shal....