TMI Blog1990 (1) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... cant. 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.. Compensation: We would be charging you a compensation of Rs. 1,47,000 over and above the c.i.f. value payable o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reof...............". 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 buyer or his agent as required under the contract. But, where the seller retains control over the goods by obtaining a bill of lading in his na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 lading. According to Mr. Jetly, such a declaration can only be filed by the actual importer. A buyer from such an importer is, therefore, not an impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons 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 customs duty on the owner of the goods as well as on the person holding himself out to be the importer of the goods. It includes the buyers in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether freight and expenses incurred by the dealer in order to bring the goods from their place of manufacture to their place of sale could be excluded from the sale price. This was negatived by the Supreme Court. These decisions have no relevance to the questions before us. In connection with inclusion or exclusion of freight from turnover, Mr. Patel, learned Advocate for the applicant, had also relied upon a decision of the Supreme Court in the case of Hyderabad Asbestos Cement Products Ltd. v. State of Andhra Pradesh, reported in [1969] 24 STC 487. This case also has no direct bearing on the question before us. 19.. It was submitted by Mr. Jetly that excluding customs duty from the turnover of sales of the applicant would be contrary to the scheme of the Act. When the sales tax is levied as a single point sales tax, the collection of sales tax would be affected by the exclusion of customs duty from the price. We are unable to appreciate this argument. We do not see how the scheme of the Act is in any way affected by the exclusion of the customs duties paid in the circumstances of the present case from the sales turnover of the applicants. 20.. The question, therefore, referr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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