TaxTMI 
TaxTMI 
2015 (1) TMI 545
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....ization from the Deputy Commissioner (CT), Visakhapatnam authorizing the respondent to take up assessment, under the CST Act, for the years 2005-06 and 2006-07. 2. For the tax period 2005-06, the Commercial Tax Officer, Chinawaltair Circle, Visakhapatnam issued show cause notice dated 19.11.2005, proposing to reject the petitioners claim of exemption on a turnover of Rs. 1,14,86,342/-, treating the transaction as an inter-state sale falling under Section 3(a) of the CST Act. In respect of the said turnover, the petitioner (M/s. Vellanki Frame Works) had claimed exemption from payment of tax on the ground that the relevant sales were effected by transfer of documents of title before the goods had crossed the customs frontiers of India. In their reply to the show cause notice, the petitioner sought to explain the transactions, relatable to the turnover of Rs. 1,14,86,342/-, which they claimed was covered by Section 5(2) of the CST Act. The petitioners case, as is noted by the assessing authority in the assessment order, is that M/s. Radha Industries, Lucknow, U.P (Radha for short), was their close business associate; Radha, which did not have the requisite infrastructure with the cu....
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....goods to Radha; on the contrary, as the petitioner had acted as the agent of Radha, at all points of time including at the time of purchase, the question of the petitioner selling the goods to Radha did not arise; the transactions between the petitioner and Radha cannot be treated as a transaction between one principal and another; the fact that the petitioner had charged commission at 2% plus bank charges to Radha, and had parted with the entire amount to Indus is proof that they had only acted as a conduit, as a friendly gesture to Radha; the transaction was accounted in the petitioners books of accounts as an agency purchase; receipt and payment of commission was also accounted in their books of accounts; their Balance Sheet for the year also supported this submission; transfer of imported goods by them to Radha did not partake the character of sale of goods; in any event the transfer, having being effected over high seas before bonding with the custom authorities, cannot be treated as inter-state sale in the State of Andhra Pradesh; and therefore further proceedings, in pursuance of the show cause notice, should be dropped. 3. In the assessment order dated 20.01.2010, the Comm....
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....oprietor of the petitioner) had presented the bill of entry for warehousing; customs duty was assessed on the petitioner alone vide bill of entry for warehousing dated 12.12.2005; subsequently, the petitioner had filed the bill of entry for home consumption; customs duty was assessed on the petitioner alone vide bill of entry for ex-bond No.804353 dated 28.12.2005; the high sea sale agreement dated 12.12.2005 had not come into operation; sale, subsequent to customs clearance, had alone taken place; the petitioner had raised a debit note dated 12.01.2006 showing sales to M/s. Radha Industries for Rs. 1,14,86,342/-; the high sea sale agreement dated 12.12.2005, entered into between the petitioner and the buyer, indicated that the parties intended to effect the transaction by a transfer of documents of title to the goods before the goods had crossed the customs frontiers of India; the sale, however, was not effected in such a manner; and the sale, in fact, took place on 12.01.2006 as shown in the debit note. 5. On the petitioners claim for exemption, on the ground that the said sale was effected by a transfer of documents of title to the goods before the goods had crossed the customs....
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....73 PCS of Malaysian Round Logs from Singapore to Vizag; the bill of lading was claimed to have been endorsed in favour of the assessee; on the strength of such an endorsement, Sri Sanjiv Kumar Agarwal, Vellanki Frame Works, Vizag (the assessee) had filed the bill of entry for warehousing; he filed the bill of entry for ex-bond based on which duty was assessed on him alone; and the assessee had reported the said transaction as high sea sales to M/s.Indo - Bitumen Products, Rajasthan by raising a debit note. The assessment order also refers to four other transactions in all of which the bill of lading was endorsed in favour of the assessee; on the strength of the endorsement Sri Sanjiv Kumar Agarwal, Vellanki Frame Works, Vizag (assessee) had filed the bill of entry for warehousing; he had, subsequently, filed the bill of entry for ex- bond based on which duty was again assessed on him alone; and he had reported the said transaction as high sea sales to M/s.Pine Exporters, New Delhi by raising a debit note. 7. The assessing authority also held that transfer of documents of title, before clearance of goods by the customs authorities on making assessment, would be a sale in the course....
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....is convenient to examine the rival submissions, urged by Learned Counsel on either side, under different heads. I. DOES THE TERRITORIAL ASSESSING AUTHORITY, BEFORE WHOM THE DEALER FILES HIS RETURNS UNDER THE CST ACT, HAVE JURISDICTION TO PASS AN ASSESSMENT ORDER IN THE ABSENCE OF AUTHORISATION FROM THE DEPUTY COMMISSIONER? 9. Sri S. Ravi, Learned Senior Counsel appearing on behalf of the petitioner, would submit that the power of assessment is found in Section 21(3) & (4) of the A.P. Value Added Tax Act, 2005 (VAT Act for short) read with Rule 25(5) of the A.P. Value Added Tax Rules, 2005 (VAT Rules for short); under Sections 21(3) & (4) of the VAT Act, the authority competent to assess the petitioner to tax is the prescribed authority; under Rule 59(4) (ii)(b) the Commercial Tax Officer or the Deputy Commercial Tax Officer, having territorial jurisdiction over the dealers in the circle, also require authorization from the Deputy Commissioner concerned to make assessment; the corresponding Sections indicated thereagainst are Sections 21(3), (4) & (5) and Rule 25(5); an assessment can be made, under Section 21(3), (4) or (5) of the VAT Act read with Rule 25(5) of the VAT Rules, on....
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....prescribed, the authority prescribed, wherever mentioned, means the one prescribed by the Rules; no officer can assume jurisdiction to himself under the VAT Act, (at the relevant point of time i.e., prior to 23.1.2013), that he is competent to assess a dealer merely because he falls within his territorial jurisdiction, unless there is an authorization for assessment; and, consequently, the respondent cannot assess the petitioner under the CST Act merely because he is the territorial assessing authority unless he is authorised by the Deputy Commissioner of the Division. 10. On the other hand Sri P.Balaji Varma, Learned Special Standing Counsel for Commercial Taxes, would submit that the assessing authority has jurisdiction to pass the impugned order in terms of Rule 14-A(6) of the AP Rules; Section 4 of the APGST Act, 1957 conferred power on the State government similar to those conferred by Section 3-A of the VAT Act; in the exercise of its powers under Section 4, the Government of Andhra Pradesh delegated, to the Board of Revenue, the power to notify the local limits within which the officers may perform the functions conferred on them by or under the APGST Act; by virtue of Sect....
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.... and they, meaning the State agencies, may exercise powers under the general sales tax law of the State. Section 9(2) of the CST Act only adopts the procedure of the State Act for assessment, re-assessment, collection and enforcement of tax payable under the CST Act. (Khemka & Co. (Agencies) Pvt. Ltd. v. State of Maharashtra (1975) 35 Company Cases 571; B. H. Shah & Co. v. The State of Madras 20 STC 146). The law, which the States' sales tax authorities must apply, is the CST Act. In such application, for procedural purposes alone, the provisions of the State Act are available. (India Carbon Ltd. v. State of Assam 1997 (106) STC 460). In view of Section 9(2) of the CST Act, the assessing authority under the VAT Act would, ordinarily, have been the assessing authority under the CST Act also. Section 9(2) of the CST Act uses the words subject to. The phrase subject to conveys the idea of a provision yielding place to another provision or other provisions to which it is made subject. (Chandavarkar Sita Ratna Rao v. Ashalata S. Guram (1986) 4 SCC 447; South India Corpn. (P) Ltd. v. Secy., Board of Revenue, Trivandrum AIR 1964 SC 207 = (1964) 4 SCR 280). As Section 9(2) of the CST A....
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....uiry as he considers necessary and after giving the dealer an opportunity of proving the correctness and completeness of the return submitted by him, determine the turnover to the best of his judgment; and finally assess, in a single order, the tax payable under the Act. Rule 14-A(7) stipulates that if, on the final assessment made under Rule 14-A (5) or (6), any tax is found to be due from the dealer, the assessing authority shall serve on him a notice in Form CST VII, and the dealer shall pay the sum demanded in the notice within such time and in such manner as specified therein. Under Rule 14-A(8) if, for any reason, the whole or any part of the turnover of a dealer has escaped assessment to tax, or has been under assessed in any year, the assessing authority may, after issuing a notice to the dealer and after making such enquiry as he considers necessary, determine, to the best of his judgment, the correct turnover, and assess the tax payable on such turnover within the time stipulated therein. Though Rule 2[c] of the AP Rules defines an appropriate assessing authority, the words appropriate assessing authority do not find mention in Rule 14-A, and reference is made therein onl....
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....nfers power to receive VAT returns on the Commercial Tax Officer of the circle, Rule 59(1)(4)(ii) of the VAT Rules hitherto conferred the power of assessment on the Commercial Tax Officer only if he was authorized by the Deputy Commissioner. Rule 14-A (1)(a) of the AP Rules requires a dealer under the CST Act to submit a monthly return to the assessing authority who, in terms of Rule 59(1)(3) of the VAT Rules, is the Commercial Tax Officer of the circle. The Commercial Tax Officer, before whom the dealer files his monthly CST returns, is therefore empowered to make assessment under the CST Act, and he does not require any authorization from the Deputy Commissioner to do so, unlike the power to make assessment under the VAT Act. Such an authority would also be the assessing authority under Rule 2[c] r/w.Rule 14-A of the AP Rules, notwithstanding that he is not the prescribed authority to make assessment under Section 21 of the VAT Act. 15. Section 2(4) of the VAT Act defines assessing authority to mean any officer of the commercial tax department authorized by the Commissioner to make any assessment in such area or areas or the whole of the State of Andhra Pradesh. Section 3-A of t....
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....), use the term prescribed. The authority prescribed is the one prescribed by the Rules. (Sri Balaji Flour Mills2). Section 21 of the VAT Act relates to assessments. Section 21(1) stipulates that where a VAT dealer fails to file a return, in respect of any tax period within the prescribed time, the authority prescribed is required to assess the dealer, for the said period for such default, in the manner prescribed. Section 21(3) enables the prescribed authority, if he is not satisfied with a return filed by the VAT dealer or the return appears to be incorrect or incomplete, to assess the dealer to the best of his judgment. Section 21(4) enables the prescribed authority, based on any information available or on any other basis, to conduct a detailed scrutiny of the accounts of any VAT dealer and, where any assessment as a result of such scrutiny becomes necessary, to then make such assessment. Section 21 confers the power to make assessment specifically on the prescribed authority which, in view of Section 2(24), means the authority prescribed under the Rules. Sl.No.4 of the table, under Rule 59(1), relates to assessments under the VAT Act and, under Sl.No.4(ii)(b), the Commercial T....
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.... the proviso thereto, any of the higher authorities viz., the Deputy Commercial Tax Officer and the Commercial Tax Officer could, in his discretion, exercise the powers of a lower authority within his jurisdiction in respect of any dealer or class of dealers; and the Deputy Commissioner (Commercial Taxes) of the division concerned could, by order, authorize any Deputy Commercial Tax Officer to exercise the powers of an assessing authority in the case of any dealer or class of dealers whose total turnover exceeded Rs. 15.00 Lakhs a year. 18. The APGST Act, 1957 was repealed by Section 80(1) of the VAT Act. However, in view of the proviso thereto, such repeal did not effect the previous operation of the APGST Act or any right, title, obligation or liability already acquired, accrued or incurred thereunder; and, subject thereto, anything done or any action taken (including any appointment, notification etc.) in the exercise of any power conferred by or under the APGST Act must be deemed to have been done or taken in the exercise of the powers conferred by or under the VAT Act, as if the VAT Act was in force on the date on which such thing was done or action was taken. While the asses....
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....ld Best Trading Co. (L.L.C.), Dubai (the Seller), Indus Tropics Limited (Indus) (importer), Vellanki Frameworks (the Petitioner) and Radha Industries, contemplated purchase of goods by the importer from the seller, and purchase of goods from Indus by Radha Industries through the petitioner; the agency agreement, to be executed by Radha Industries in favour of the petitioner, was annexed to it; this agreement entrusted the work of clearance of goods at the port to the petitioner; the petitioner was entitled to 2% commission on the transaction; on the strength of the quadripartite agreement, a purchase order was placed by the importer on the Seller; the seller invoiced the goods to the importer; a Bill of Lading was issued by the shipping carrier; the bill of lading was endorsed by the importer in favour of the petitioner and was, subsequently, endorsed by the Petitioner in favour of Radha Industries while the goods were in high seas; the endorsement was also supported by a High Sea Sale Agreement between the importer and the Petitioner, and a subsequent High Sea Sale Agreement between the Petitioner and Radha Industries; the goods were dispatched from Yangoon (Myanmar), and were rec....
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....ggrieved party has a legal right under the statute to enforce its performance. (Tirumala Tirupati Devasthanms v. K. Jotheeswara Pillai (2007) 9 SCC 461; The Bihar Eastern Gangetic Fishermen Cooperative Society Ltd. v. Sipahi Singh AIR 1977 SC 2149; Oriental Bank of Commerce v. Sunder Lal Jain (2008) 2 SCC 280; Lekhraj Satramdas Lalvani v. Deputy Custodian-cum-Managing Officer AIR 1966 SC 334; Dr. Rai Shivendra Bahadur v. The Governing Body of the Nalanda College AIR 1962 SC 1210 and Dr. Umakant Saran v. State of Bihar AIR 1973 SC 964). The duty that may be enjoined by a mandamus may be one imposed by the Constitution, a statute, common law or by rules or orders having the force of law. (Director of Settlements, A.P. v. M.R. Apparao ; Kalyan Singh v. State of U.P. (2002) 4 SCC 638). In order that a writ of mandamus may be issued, the party asking for the writ must have a legal right to compel the performance of some statutory duty cast upon the authorities. (Oriental Bank of Commerce16). It is not even the petitioners case that the first respondent has failed to perform a statutory duty cast upon him or that the petitioners legal right has been adversely affected. The petitioner is,....
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....evidence, cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of fact, however grave it may appear to be. In regard to a finding of fact recorded by the Tribunal, a writ of certiorari can be issued if it is shown that, in recording the said finding, the Tribunal had erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has influenced the impugned finding. Similarly, if a finding of fact is based on no evidence, that would be regarded as an error of law which can be corrected by a writ of certiorari. A finding of fact recorded by the Tribunal cannot be challenged in certiorari proceedings on the ground that the relevant and material evidence adduced before the Tribunal was insufficient or inadequate to sustain the impugned finding. The adequacy or sufficiency of evidence led on a point, and the inference of fact to be drawn from the said finding, are within the exclusive jurisdiction of the Tribunal, and the said points cannot be agitated before a Writ Court. To be amenable to correction in certiorari jurisdiction....
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.... attracting the character of local goods; they cease to be foreign goods thereafter; on filing of the bill of entry for warehousing and ex-bond, the petitioner alone was assessed to customs duty; the import stream had dried upon such clearance by the customs authorities; the goods had mixed into the stream of local goods; as is ascertainable from the bills of entry from warehousing and ex-bond, transfer of title had not taken place before filing of the bills of entry and assessment of customs duty; the sale took place after assessment was made on the petitioner, and on their filing the bills of entry; the goods must be held to have crossed the customs frontiers of India, after the bill of entry was made and the goods were assessed to customs duty; thereafter the sales cannot be said to be sales in the course of import or high sea sales; and the transactions, on which the petitioner had claimed exemption as high sea sales, should be treated as inter-state sales falling under Section 3(a) of the CST Act. 28. In passing the impugned assessment orders, and in subjecting the transactions to tax as an inter-state sale under Section 3(a) of the CST Act, the assessing authority has not ta....
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....er to file a bill of entry and pay duty; and, consequently, the contention that payment of customs duty by the Petitioner is conclusive of the import having ended, and any sale by the Petitioner thereafter can only be a domestic sale, does not flow from the provisions of the Customs Act or from the assessment order. 30. Sri P.Balaji Varma, Learned Special Standing Counsel for Commercial Taxes, would submit that the petitioner alone was assessed to Customs duty; he is therefore the last buyer and owner or importer of the goods; the petitioner was assessed to duty, by virtue of his filing the Bill of Entry, as the importer; the system permitted only the petitioner to file the Bill of Entry as his name alone was recorded in the Import General Manifest (IGM); based on the data made available in the IGM, the Bill of Entry also showed only the name of the foreign seller, the name of the original importer, and the name of the petitioner as the importer being the ultimate buyer; the contents of the Bill of Entry make it clear that there is no high sea sales, subsequent to the high sea sales in favour of the petitioner; the petitioner herein became the last buyer in the importation; as suc....
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.... outside the State of A.P; the facts pleaded do not establish a high-sea sale, but lead to the inevitable conclusion of a inter-state-sale; be it under a principal agent relationship, or under a sale, the main contention of the petitioner is that the goods were transferred on the high seas, and is a high sea sale; their contention is also that they are the transferor and Radha Industries is the transferee; if the petitioner sells goods to M/s Radha Industries, and yet gets himself assessed to customs duty, (assuming such transaction is true), it can only mean that the petitioner and Radha Industries had colluded to evade customs duty on the sale transaction value; the case pleaded before this court, and also before the assessing authority, is that the petitioner had sold goods to Radha Industries as a 2nd High Sea Sale; while a Bill of Entry for warehousing would not result in termination of importation, a Bill of Entry for home consumption terminates the importation; a Bill of Entry for home consumption is submitted only when the Importer intends to get the goods released for home consumption; upon entry of goods in the import manifest (Section 46 of the Customs Act), custom duty ....
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....xpressions, to mean bringing into India from a place outside India. Section 2(25) defines imported goods to mean any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption. Use of the words does not include in Section 2(25) would mean that the moment goods, brought into India from a foreign country, are cleared for home consumption, they get mixed with the local goods and cease to be imported goods thereafter. Going by the definition of the term 'import' under Section 2(25) of the Act as "to bring into India from a place outside India," and as he has imported the goods (his name being reflected in the Bill of Entry as the importer), the petitioner has rightly been held to be the importer. 33. In ordinary understanding, goods would not be thought to have been imported if they were carried through the territorial waters of the Indian coast by a ship which did not put them into an Indian port. Importation of goods does not take place as soon as the ship carrying them enters the marginal seas, perhaps only to leave them again for navigational purposes as it moves towards the port of discharge. Entry into the ....
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....ts them. The ingredients of the term 'import' have to be linked with the importer of the country of destination of the goods. The mere fact that the goods have crossed the customs frontiers in a Port, in which the importer has no intention to have the goods delivered from the ship, will not amount to import for the simple reason that the importer had no intention whatsoever, in relation to those goods, to have access to the goods except at the Port of destination. (Shri Ramlinga Mills Pvt. Ltd.30; Brown v. State of Maryland (1987) 12 Wheat 419 at p. 442 = 6 Law Ed. 678). As regards the importer who contracted for the goods, and the carriage thereof to a particular port, the question of importation has to be determined in the light of the statutory provisions but without forgetting the central fact that the importer has intended the goods to be imported at the particular port. Importation takes place only when the vessel has crossed the customs barriers at the intended port of importation. (Shri Ramlinga Mills Pvt. Ltd.30; Muller v. Badurin (1849) 9 Q.B. 459). 35. The importer of the goods is, therefore, the person who brings into India the goods from a place outside. The c....
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....e they are cleared for home consumption, the owner or a person holding himself out to be an importer. Any ordinary meaning of the word importer is not excluded by Section 2(26), and an extended meaning is to be given thereto. (Carter v. Bradbeer 1975 (3) All E R 158). 37. The words, namely, 'at any time between their importation and the time when they are cleared for home consumption' occurring in the second part of Section 2(26) are significant. What does the word importation mean? The word importation is not defined in the Customs Act. It means the commercial activity of buying and bringing in goods from a foreign country. The word importation is defined in Blacks Law Dictionary Sixth Edition as the act of bringing goods and merchandise into a country from a foreign country. (Cunard Steamship Co. v. Mellon 262 U.S. 100, 43 S.Ct. 504, 67 L.Ed. 894). The word importation is defined in P.Ramanatha Aiyers The Law Lexicon Reprint Edition 2002 as the bringing goods and merchandize into the kingdom from other nations. (Tamlins Law Dic.); a thing is imported when it reaches the borders of the country. If it is imported by water then, as soon as a vessel reaches an Indian port, t....
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....e date of importation and clearance of the goods for home consumption. But here the petitioner, in whose name the goods have been manifested, has, by filing a Bill of Entry, already held himself out to be the importer. As shall be detailed hereinafter, the import manifest has not been amended, the petitioner has filed the Bill of Entry for clearance of the goods for home consumption, and has held himself out to be the importer. In the context of Section 48 of the Customs Act whereunder, if the notified importer does not clear the goods or abandons the goods, the authorities having custody of the goods can only sell the goods by auction, another person cannot be substituted as the importer. The name of the importer cannot be changed in the manifest where fraud is detected in the import as any such amendment is impermissible under Section 30(3) of the Customs Act. If the contention of the petitioner, that any person can file a bill of entry for clearance of goods for home consumption, is accepted, the importer can easily substitute himself by some other person, to file the bill of entry for clearance, whenever any consignment is liable for confiscation for violation of the provisions....
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....hall carry on business as an agent, relating to the entry or departure of a conveyance or the import or export of goods at any customs-station, unless such person holds a licence granted in this behalf in accordance with the regulations. An obligation is cast on the Custom House Agent, acting on behalf of the importer, to comply with Section 30 of the Act. (J.B. Trading Corporation37). 41. Section 30(3) of the Customs Act read with the Levy of Fee (Customs Documents) Regulations, 1970, allows the proper officer to permit an IGM to be amended or supplemented, on payment of prescribed fees, if he is satisfied that there is no fraudulent intention. The Central Board of Excise and Customs has provided for two broad categories of amendments Major and Minor. The major amendments include changing the Importers/consignees name. Section 32 stipulates that no imported goods, required to be mentioned in an import manifest or import report, shall, except with the permission of the proper officer, be unloaded at any customs station unless they are specified in such manifest or report for being unloaded at that customs station. In the exercise of the powers conferred by Section 157 of the Custo....
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....ed by the Commissioner of Customs, until they are cleared for home consumption or are warehoused. Section 46(1) requires the importer of the goods to make an entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed form. Section 46(3) requires a bill of entry, under sub-section (1), to be presented at any time after the delivery of the import manifest. Section 46(4) requires the importer, while presenting a bill of entry, to make and subscribe, at the foot thereof, a declaration as to the truth of the contents of such bill of entry and, in support of such declaration, to produce to the proper officer the invoice, if any, relating to the imported goods. Section 47 relates to clearance of goods for home consumption and, under sub-section (1) thereof, where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods, and the importer has paid the import duty, if any, assessed thereon and any charges payable under the Act in respect thereof, he may make an order permitting clearance of the goods for home consumption. Under the proviso to Section 149, no amendment of a bill of entry s....
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....equired to be submitted with the Bill of Entry. The correctness of the information has also to be certified by the importer in the form of a declaration at the foot of the Bill of Entry, and any mis- declaration/incorrect declaration has legal consequences. 46. In the exercise of the powers conferred by Section 157 read with Section 46 of the Customs Act, the Central Board of Excise and Customs made the Bill of Entry (Electronic Declaration) Regulations, 1995. Regulation 2(a) thereof defines authorized person to mean (i) the Customs House Agent who holds a permanent licence under the Customs House Agents Licensing Regulations, 1984, and is authorised by the Commissioner of Customs with a user identification; or (ii) an importer who holds a valid Import Export Code number, and is specially authorized by the Commissioner of Customs with a user identification for the purpose of obtaining clearance of goods imported by him. Regulation 2(b) defines bill of entry to mean the electronic declaration accepted and assigned with a number by the Customs Computer system for further processing. Regulation 2(d) defines electronic declaration to mean the declaration of the particulars relating to....
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....the transaction (sale/consignment/ hire/gift/others), the terms of payment (LC/FOC/DP/SD/others), conditions attached with the sale (if any), and whether the buyer and seller are related. The said form also contains a declaration certifying that the aforesaid documents, and the information therein, are true and correct. The said declaration is required to be signed either by the importer or the clearing house agent. 48. This Bill of Entry is subject to verification by the proper officer of Customs (under the self assessment scheme), and may be re-assessed if the declaration is found to be incorrect. The first stage for processing a Bill of Entry is termed as the noting/registration of the Bill of Entry vis--vis the IGM filed by the carrier. The import clearance documents are tallied with the related IGM to ensure that the goods, sought to be cleared, have been declared in the particular IGM of the vessel/aircraft mentioned in the Bill of Entry. The Bill of Entry is checked with the consignment sought to be cleared having been manifested in the particular vessel, and a Bill of Entry number is generated and indicated on all copies. After noting, the Bill of Entry is sent to the appr....
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....agent. It is evident, from the said Bill of Entry, that the goods were imported by the petitioner, and were cleared from customs with the assistance of the customs house agent M/s.Srinivasa Transports. If, as contended by the petitioner, the goods were sold by them to M/s.Radha Industries on high seas, and before the goods entered the customs port, the name of the importer should have been shown as Radha Industries, and not as Sanjiv Kumar Agarwal, Vellanki Frameworks. The fact that the name of the importer is shown as Sanjiv Kumar Agarwal, Vellanki Frameworks, and the Bill of Entry makes no reference to Radha Industries, goes to show that the goods were imported by the petitioner on a high sea sale effected in their favour by Purbanchal Lumbers Private Limited; it is they who had imported the goods; and sale of goods by them to Radha Industries could only have been effected after the goods had been cleared for home consumption. (D). CAN AN AGENT FILE A BILL OF ENTRY IN HIS NAME? 50. The functions and responsibilities of the CHA, as an Agent, are limited to arranging release of the goods, and once the goods are cleared he has no further responsibilities to discharge. Section 147 ....
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....lful act, negligence or default of the agent, the agent shall not be liable for payment of that duty, save and except where, in the opinion of the Assistant Collector of Customs, the duty cannot be recovered from the owner or the importer. Section 147(3) read with the proviso specifies circumstances in which the clearing agent can be treated as the owner/importer of the goods and made liable for the payment of duty. (Trivandrum Rubber Works Ltd48). On a conjoint reading of Sections 12, 28 and 147 of the Customs Act, it is clear that, in cases in which duty had not been levied, the owner should be called upon to pay customs duty. It is only if the amount cannot be recovered from the owner, can it be collected from the agent. (Pilmen Agents (P) Ltd. v. Collector of Customs, Madras 2000 (126) E.L.T. 79 (Mad.) = AIR 1967 Madras 124). 52. If, as contended by him, the petitioner was merely acting as an agent, the bill of entry would have reflected the name of the importer as M/s.Radha Industries and the petitioner as their agent instead of M/s. Srinivasa Traders as the clearing house agent; and the petitioners name would have been recorded in the bill of entry, along with Purbanchal Lum....
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....in the case of imported goods, shall include, in addition to the price as aforesaid, any amount paid or payable for costs and services, including commission and brokerage, engineering, design work, royalties and licence fees, cost of transportation to the place of importation, insurance, loading, unloading and handling charges to the extent, and in the manner, specified in the Rules made in this behalf. The value of the imported goods, for the purpose of levy of Customs Duty, is required to be determined in terms of Section 14 of the Customs Act read with the Customs Valuation (Determination of Prices of Imported Goods) Rules, 2007. Section 15(1) stipulates that the rate of duty and tariff valuation, if any applicable to any imported goods, shall be the rate and valuation in force (a) in the case of goods entered for home consumption under Section 46, on the date on which a bill of entry in respect of such goods is presented under that section; (b) in the case of goods cleared from a warehouse under Section 68, on the date on which a bill of entry for home consumption in respect of such goods is presented under that section; [c] in the case of any other goods, on the date of paymen....
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....and the name on the bill of entry is irrelevant because the name of the importer alone will be recorded in it, even if the transfer of title deeds is effected before filing of the bill of entry and assessment of duty under Section 28 of the Customs Act. 57. In Minerals and Metals Trading Corporation of India Ltd.54, the assessee claimed exemption on a part of the turnover as sales in the course of import under Section 5(2) of the CST Act, contending that it had imported goods from foreign parties and, as it had transferred the bills of lading in favour of the local buyers before the customs clearance of goods was effected, they were sales in the course of import under the second limb of Section 5 (2) read with Section 2 (ab) of the CST Act. The Commercial Tax Officer disallowed the exemption holding that the crucial date, for the purpose of determining exemption, is the date of arrival of the vessel; and no exemption could be claimed as the original statement of facts issued by the Master of the ship was not filed. The petitioner had filed the certificates issued by the customs authorities indicating the time of customs clearance in respect of most of the shipments. The Commercial....
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....station. Customs port means any port appointed under Section 7(a) and includes a place appointed under clause (aa) of that section to be an inland container report. Customs airport means any airport appointed under clause (a) of Section 7. Land customs station means any place appointed under. Section 7(b), A reading of Section 2(ab) makes it clear that if the goods crosses the area of the customs station viz., the customs port which is notified under Section 7 of the Act, where the goods are kept before clearance and if the transfer is effected by transfer of documents of title then it amounts to sale in the course of import. In other words if the goods are kept in the port before clearance, crossing the limits of that port amounts to sale in the course of import. "..We have already referred to Section 5(2) read with Section 2(ab). The goods will cross the limit of the area of the customs station only on clearance by the customs authorities. Clearance by the customs authorities will be after filing the bill of entry and after the assessment of duty under Section 38 of the Act. Before the assessment of the duty the goods kept in the customs port cannot cross the limits of the custo....
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.... Division Bench held as under:- "...We also point out that the name on the bill of entry is irrelevant because the name of the importer alone will be recorded in it even if the transfer by title deeds is effected before filing the bill of entry and assessment of duty under Section 28. We have to make this clear because the taxing authorities tend to raise such doubts though the amendment was specifically made to have a clear cut off time to determine when the import ends. Therefore, let it be declared that if the transfer of title deeds is effected before filing the bill of entry and making the assessment then the sale is deemed to have been effected in the course of import, otherwise not. In the light of the above, the assessing authorities are directed to hold an enquiry and decide in each case, whether the transfer is before filing the bill of entry and making assessment of duty or thereafter. The TRCs are accordingly disposed of. (emphasis supplied) 59. The quotable in law is avoided and ignored if it is rendered in ignoratium of a statute or other binding authority. (Young v. Bristol Aeroplane Co. Ltd (1944) KB 718). A decision passes sub-silentio, when the particular point....
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....ter Bombay (2005) 6 SCC 404; State of Orissa v. Sudhansu Sekhar Misra AIR 1968 SC 647; Quinn v. Leathem (1901) AC 495). Observations, on matters not in issue in the case, are not meant to be and ought not to be regarded as laying down the law. (K. Veeraswami v. Union of India (1991) 3 SCC 655). The view, if any, expressed without analysing the statutory provision cannot be treated as a binding precedent. (N. Bhargavan Pillai62). A decision not expressed and accompanied by reasons, and not preceded by a conscious consideration of the issue, cannot be deemed to be a law declared to have binding effect. (Arnit Das v. State of Bihar (2000) 5 SCC 488; M.R. Apparao20; Synthetics and Chemicals Ltd.60; B. Shama Rao59). 61. The law declared by the Division Bench, in Minerals and Metals Trading Corporation of India Ltd.54, is that when the goods are assessed to duty by the Customs Authorities, after the bill of entry is filed, the importation is completed even if duty is not paid, and the goods remain within the customs station; it is only after the Bill of Entry is filed, and the import duty is assessed, can the goods cross the limits of the Customs Station; transfer of documents of title ....
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....he writ petition; Sale and no-sale being opposite to each other and the petitioner, being the master of his transaction, is not entitled to take opposite stands; these contentions are an afterthought made only for the purpose of evading tax; this contention is contrary to their other contentions, and the material on record; the writ petition is liable to be dismissed on this ground alone; the petitioners contention that the import is as a consequence of the master agreement, the import was occasioned due to the purchase by M/s. Radha Industries, and it is a case of import under Section 5(2) is not tenable; the law requires the last buyer/last importer to file the Bill of Entry; the Bill of Entry requires the names of all the parties to be mentioned therein i.e, the export seller, the original importer, the high sea buyer(s) if any, and the last buyer/importer; and the circumstances and facts pleaded, both before the Assessing Authority and before this Court, do not make out a case of direct import by M/s. Radha Industries. 65. Under Section 5(2) of the CST Act, the sale or purchase of goods shall be deemed to take place in the course of import of the goods into the territory of Ind....
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....Taxes, would submit that the facts pleaded in the instant case do not make out a case for applying the procedure adopted, or the law applicable, to Duty Free Shops; the case of the petitioner is that they had sold the goods even prior to filing of the Bill of Entry; even in the case of Duty Free Shops, the goods stored therat are treated as goods warehoused for a particular period; upon expiry of the time, the unsold goods are required to be taken out for home consumption by filing a Bill of Entry Ex-bond/for home consumption under Section 68 of the Customs Act; in the event of a change in ownership/name of importer, an amended Bill of Entry for warehousing, and a Bill of Entry Ex-bond is filed; and such is not the case on hand. 68. No tax, on the sale or purchase of goods, can be imposed by any State when the transaction of sale or purchase takes place in the course of import of the goods into the territory of India. If any transaction of sale or purchase takes place when the goods are being imported into India, no State can impose any tax thereon. Under Section 5 of the CST Act, a sale or purchase of goods shall be deemed to take place in the course of import of the goods into t....
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....native case either before the authorities or before this Court; there is no pleading or prayer for such a relief; the assessment order was passed in the year 2010, the writ petition was numbered in the year 2013, and interim orders were obtained; now, at the stage of final hearing that too after completion of oral arguments and submission of written arguments by both sides, the petitioner cannot plead an alternative case; the effect of granting such a relief would be (1) a fresh order would have to be passed thereby granting further time to make payment of the determined amount; (2) a fresh order on a new plea, that too at this stage, would save the interest burden on delayed payment on the dealer, and loss of interest to the Revenue; (3) a fresh order, on a new plea at this stage, would amount to granting a benefit to the defaulter at the cost of the Revenue; (4) once the matter is remanded for furnishing C Forms, even if the petitioner fails to produce the C-Forms, he would be saved from payment of interest liability from 2010 (the date of the assessment order), and they would also have the benefit of challenging the orders once again by filing a first appeal, a second appeal and....
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....t the Hyderabad factory and their movement thereafter from Hyderabad to the branch office outside the State was an incident of the contract entered into with the buyer, for it was intended that the same goods should be delivered by the branch office to the buyer. There was no break in the movement of the goods. The branch office merely acted as a conduit through which the goods passed on their way to the buyer. It would have been a different matter if the particular goods had been despatched by the registered office at Hyderabad to the branch office outside the State for sale in the open market and without reference to any order placed by the buyer. In such a case if the goods are purchased from the branch office, it is not a sale under which the goods commenced their movement from Hyderabad. It is a sale where the goods moved merely from the branch office to the buyer. The movement of the goods from the registered office at Hyderabad to the branch office outside the State cannot be regarded as an incident of the sale made to the buyer." (emphasis supplied) 72. Having opined that the disputed transactions were inter- State sales, the Supreme Court held that it was only appropriat....
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....ay and receive the C forms; but if he thought that the question of sufficient cause called for a further inquiry or investigation into facts, which could not be conveniently done, he could remit the matter to the assessing authority to determine the said issue. 75. The judgment of the Division Bench in Rajeswari Stone Polishers73 was referred with approval by the Supreme Court in State of Andhra Pradesh v. M/s.Hyderabad Asbestos Cement Production Limited (1994) 94STC 410(SC) wherein it was held that the power, under the proviso to Rule 12(7) ,could be exercised only when sufficient cause was shown by the dealer, for not filing them upto the time of assessment, before the first assessing authority; if, in a given case, a dealer had obtained further time from the first assessing authority, and yet failed to produce them before him, the appellate authority should adopt a stiffer standard in judging the sufficient cause shown by the dealer for not producing them earlier; receipt of those forms in appeal cannot be as a matter of course; it should be allowed only where sufficient cause is established by the dealer for not producing them before the first assessing authority as contemplat....