The main legal point established is that the Bill of Lading is the document of title, and the Revenue's case based on entries in the Bill of Entry was without merit.

CHITRA VENKATARAMAN, J:

1. The Revenue is on revision as against the order of the Tribunal relating to assessment year 1992-93. The following substantial questions of law were raised for consideration:-

(i) Whether in the facts and circumstances of the case, the order of the Tribunal upholding the claim of exemption as high sea sales under Section 5(2) of the CST Act is legally sustainable?

(ii) Whether in the facts and circumstances of the case, the finding of the Tribunal that the sale was effected by transfer of documents of title have been taken place before crossing the customs frontier is legally sustainable?"

2. The assessee herein is a dealer in pharmaceuticals and chemicals. On verification of accounts, it was seen that the assessee claimed exemption on the turnover of Rs.12,50,814/- under Section 5(2) Central Sales Tax Act as representing High Sea Sales effected. In support of the claim, the assessee filed Bill of Lading and High Seas Agreement and pointed out that the goods in question were cleared by the purchaser by paying customs duty through clearing and forwarding agent and that the assessee had nothing to do with the clearance of the said goods.

3. The contention of the assessee, however, was rejected by the Officer, pointing out that on verifying the original Bill of Entry available in the Office of the Customs Department with the photocopy furnished by the assessee, it was found that the name of the assessee was found written in the original copy of the Bill of Entry available in the Customs Department. Hence, the photocopy furnished by the assessee could not be relied upon. Consequently, the Assessing Officer rejected the plea of the assessee. Aggrieved by the same, the assessee filed an appeal before the Appellate Assistant Commissioner.

4. It is seen from the order the Appellant Assistant Commissioner that after perusing the import documents and the High Sea Sales agreement, High Sea sales invoices, forwarding and clearing agent's letters and payment of customs duty by the ultimate buyer to the Customs Department, the said authority held that high sea sales were effected at Chennai Port and the buyers had paid the customs duty and the clearing and forwarding agents had cleared the goods.

5. Following the decisions of the Apex Court reported in 107 STC 75 – BRIJLAL TULSION v. COMMERCIAL TAX OFFICER and 11 STC 186 – J.V.COKAL & CO., v. ASSISTANT COLLECTOR OF SALES TAX (INSPECTION AND OTHERS), as well as the decision of the Andhra Pradesh High Court reported in 110 STC 394 – MINERALS AND METALS TRADING CORPORATION OF INDIA v. STATE OF ANDHRA PRADESH, the Appellate Authority came to the conclusion that when the import documents produced revealed that the goods imported were sold on high sea sale basis as per the agreement entered into with the ultimate buyers and the goods were cleared by clearing and forwarding agents on behalf of purchasers, the assessment could not be upheld. Thus the appeal was allowed. As against this, the Revenue went on appeal before the Sales Tax Appellate Tribunal, who concurred with the view of the Appellate Assistant Commissioner, thereby, disallowed the Revenue's appeal. Aggrieved by this, the Revenue is on revision before this Court.

6. It is seen from the facts endorsing the document of title herein that the assessee effected high sea sales by to the goods as follows:-

Sl. No. Bill of Lading Date

1 930-830-618 5.5.92

Name of the party to whom endorsed

M/s.Micro Labs Ltd., 92, SIPCOT Industrial Complex Hosur

M/s. Sri Sai Baba

2 242 22.12.92 Pharmaceuticals Private Limited, Guindy, Chennai – 32

7. The details as regards high sea sales by endorsing the documents of title to the goods to the ultimate buyer who cleared the goods before the ship crossed the custom frontier are as below:-

Sl. No. Name of the Purchaser Inv. No. & Date SaleValue Date of area crossing the custom station

1. M/s.Micro Labs Ltd 01/K Co./ 92-93 Rs.788314/- 25.6.92 Hosur dt.26.5.92

M/s.Sri Sai Baba

2. Pha