ORDER
Bilal Nazki, J.
1. All the revision cases are disposed of by this common order.
2. Facts of one of the revisions are taken note of. The facts as narrated by the petitioner, which have led to filing of T. R. C. No. 119 of 1996 are that a memorandum of understanding between the Minister of Industry, Government of Indonesia and the Minister of Steel and Mines, Government of India was signed on March 7, 1979 for import of sponge iron. An agreement dated October 27, 1979 was entered into by the petitioner with M/s. P. T. Krakatav Steel (PTKS) for import of sponge iron for distribution to the mini-steel plants in the country. As a matter of fact, two contracts were entered into by the petitioner, one for import of 30,000 tonnes, an additional quantity of 50,000 tonnes was added and another contract for import of 3,00,000 tonnes. In order to facilitate import of sponge iron, import licence was issued to the petitioner in which it was stated that the imported goods 'shall be distributed by the licensee to the actual users'. In October, 1980, the Government of India vide notification, dated October 22, 1980 nominated the petitioner as the canalising agents. According to the petitioner, mini-steel plants were required to register their requirements with the petitioner in the pro forma prescribed as per the Import Trade Policy of the Government of India. Subsequently the mini-steel plants were required to open letters of credit (LC) in favour of the petitioner for the quantity required by them. The petitioner, after receiving enough LCs from the mini-steel plants, chartered a vessel, opened a consolidated letter of credit in favour of the foreign supplier, viz., M/s. PTKS. The foreign supplier's bill of lading as well as invoice clearly indicated that the material was bought for specific mini-steel plants whose names appeared in the annexure to the bill of lading and invoices. According to the petitioner, it was the responsibility of the mini-steel plants/their agents to get the material cleared from the customs port and get the material unloaded and transported to their respective places. It is further submitted that the petitioner received a bill of lading and other documents from the foreign supplier through special courier/air freight. By this way, the petitioner endorsed the documents in favour of the mini-steel plants.
3. In view of these assertions, the contention throughout of the petitioner was that the turnovers as a result of import constituted sales made by the petitioner in the course of import and hence it was exempt under the CST and APGST Acts. It was also further contended by the petitioner that the sale of goods by them to the mini-steel plants was a sale effected by transfer of documents of title to the goods before they crossed the customs frontier of India. Alternatively, it was contended that the sale which occasioned was in the course of import of goods. Therefore the sale covering the disputed turnovers shall be deemed to have taken place in the course of import and as such they were exempt from sales tax in view of Section 5(2) of the Central Sales Tax Act and Section 38 of the Andhra Pradesh General Sales Tax Act read with Article 286(1)(b) of the Constitution of India. These contentions were rejected by the sales tax authority and also by the Tribunal. The revision is filed accordingly.
4. Before the revision is considered, it would be appropriate to have a look at Section 22 of the Sales Tax Act. Section 22 of the Act prescribes that a dealer or the authority prescribed may prefer a revision against the order on the ground that the Appellate Tribunal either decided the matter erroneously or failed to decide any questions of law. Therefore in these proceedings this Court would not be in a position to go into the question of facts decided by the authorities below. The questions of law framed in the revision are all pertaining to appreciation of evidence as regards the facts and the important fact which is needed to be decided in this case is whether the sales made by the petitioner were in the course of import and were exempt under the Central Sales Tax Act and the Andhra Pradesh General Sales Tax Act. The contention of the petitioner before the Tribunal was that the sales had been effected by transfer of documents of title to the goods before they crossed the customs frontier of India. In this connection, he relied on two facts : (1) order of the additional Collector of Customs, dated July 3, 1984 treating the Mini-steel and Sponge Iron Association Limited as the importer; and (2) annexures attached to the bills of lading and invoices raised by foreign seller showing the distribution of quantities among various actual users in respect of each consignment. After making such contentions, the petitioner pleaded his inability to secure copies of individual sale agreements between the petitioner and the actual users, copies of invoices raised by the assessee covering the disputed turnover and copies of agreements entered into by actual users appointing MSS & SIA Ltd., as agent for purposes of clearing and forwarding the goods to the user's factory. The finding of the Tribunal was:
The appellant had led no evidence regarding when the contracting parties, i.e., appellant and the actual users intended the transfer of property in goods to take place. Counsel for the appellant placed undue importance on delivery of one set of shipping documents to a mere clearing agent. And in fact the terms of invoice raised by the appellant against the actual users run contrary to the claim of high-seas sales' as discussed above. In the circumstance, the claim of high-seas sales has to be held as not substantiated.
5. The petitioner has, however, relied on a judgment of the Supreme Court reported in Deputy Commissioner of Agricultural Income-tax and Sales Tax, Ernakulam v. Indian Explosives Ltd. [1985] 60 STC 310. The facts in this case were altogether different. The Supreme Court noted:
It was not disputed that goods were imported by the respondent-assessee on the strength of the actual users' import licences that had been obtained by the customers and supplied to them for use by the latter in their factories. The sales in question were put through by the respondent-assessee, as found both by the Tribunal and the High Court, in the following manner. The indigenous purchaser, for example, M/s. Hindustan Insecticides Limited in Kerala, used to place orders with the respondent-assessee quoting his import licence number, quantity of goods, rate, etc., as agreed to by previous correspondence with the respondent-assessee; the respondent-assessee then placed orders with the foreign supplier for the supply of the goods and in such orders the name of the local purchaser who required the goods as also its licence numbers, were specified; the actual import was done on the strength of two documents like (a) the actual users' import licence and (b) letter of authority issued by the Chief Controller of Imports and Exports whereunder the local purchaser was authorised to permit the respondent-assessee on his behalf to import the goods, to open letters of credit and make remittance of foreign exchange against the said licence to the extent of value specified therein. The import licence expressly contained two conditions, (i) that the goods imported will be the property of the licence-holder at the time of clearance through the customs and (ii) that the goods will be utilised only for consumption as raw material or accessories in the licence-holder's factory and that no portion thereof will be sold to or be permitted to be utilised by any other party. Reading these two documents together it was clear that the import of the goods by the respondent-assessee was for and on behalf of the local purchaser and the respondent-assessee could not, without committing a breach of the contract, divert the goods so imported for any other purpose. On receipt of the goods the respondent-assessee used to invoice the local purchaser. Having regard to the terms and conditions on which the respondent-assessee imported the goods and the manner in which the transactions were put through, it cannot be disputed that there was an integral connection between the sale to the local purchaser and the actual import of the goods from the foreign supplier. In other words, it is clear that the movement of the goods from the foreign country (here, the United States) to India was in pursuance of the conditions of the pre-existing contract of sale between the respondent-assessee and the local purchaser. If that be so, the view of the Tribunal and the High Court that the sales in question were in the course of import will have to be upheld.
6. In the case before the Supreme Court the actual import was done on the strength of two documents, viz., the actual users' import licence and letter of authority issued by the Chief Controller of Imports and Exports whereunder the local purchaser was authorised to permit the respondent-assessee on his behalf to import the goods, to open letters of credit and make remittance of foreign exchange against the said licence to the extent of the value specified therein. Two conditions were specified in the import licence, (i) that the goods imported will be the property of the licence-holder at the time of clearance through the customs and (ii) that the goods will be utilised only for consumption as raw material or accessories in the licence-holder's factory and that no portion thereof will be sold to or be permitted to be utilised by any other party. Because of these two conditions, the Supreme Court came to the conclusion that the respondent-assessee was importing goods for and on behalf of local purchaser and the respondent-assessee could not, without committing a breach of the contract, divert the goods so imported for any other purpose. Therefore, the Supreme Court found that there was an integral connection or inextricable link between the sale and the actual import or export in order that the sale could become a sale in the course of import. On facts the petitioner has failed to establish such a link. Whereas the agreement which is supposed to have been entered between the petitioner and the Mini-Steel and Sponge Iron Association Limited gives totally a different picture. Though it refers to an annexure with respect to distribution of sponge iron, it also recognises, 'Any surplus sponge iron that may be available with NMDC after meeting the entire demand of the association shall be disposed of by the NMDC in such manner as it deems, on terms and conditions which shall not be more favourable than in the case of members of the association'. Clause 5 of the agreement further states, 'NMDC has agreed that the sales of sponge iron by NMDC to the user will be on such terms and conditions as may be mutually agreed upon and to be finalised in consultation with the association and for such purpose a separate agreement each individual user will have to be entered into between NMDC and the said user.' Reading the agreement as a whole, it creates an impression that the conditions of sale of sponge iron to various members of association had to be decided after the import.
7. Going by the judgment of the Supreme Court and also the mandate of Section 22 of the Sales Tax Act, we are of the view that no substantial questions of law are involved in these revisions. We are also of the view that the Tribunal has not decided the matters erroneously. On facts, the Tribunal has come to the conclusion that the sales were not sales in the course of import.
8. For these reasons, these revision cases have to fail and are accordingly dismissed. No costs.