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2019 (2) TMI 551 - HC - VAT and Sales TaxLocal sale or sale in the course of import - High Seas Sale - sales of the goods while being in customs bonded warehouse - interpretation of the definition of the term 'crossing of customs frontiers of India' - sales in the course of import or not - transfer of the documents of title to the goods before crossing the customs frontiers of India - import under the second limb of section 5(2) of the Central Sales Tax Act, 1956. - Exemption from sales tax / VAT Held that:- a combined reading of the definitions of the terms “customs airport”, “customs area”, “customs port” and “customs station” would indicate that these are the notified places where the goods on import, until they are cleared, have to be placed. Their custody is with the person referred by us in the aforereferred provisions. Thus, once the imported goods are unloaded in the customs area, then, there has to be entry made, save and except such goods which are intended for transit or transhipment and there is a provision for clearance of goods for home consumption. When we see this scheme in the light of the provisions contained in Chapter VI and particularly section 46 falling therein, it is evident that the filing of bill of entry means the importer of any goods, on importation, presenting this bill to the proper officer for home consumption or warehousing. If they have to be cleared for home consumption, then, the procedure under section 47 of the Customs Act, 1962 has to be followed and when they have to be warehoused after unloading, then, section 48 is the provision which has to be abided by the concerned persons. In case of warehoused goods, by section 71, it is categorically stated that goods not to be taken out of warehouse except as provided by this Act. - Thus, the import is complete on compliance of the above noted provisions of the Customs Act, 1962 and therefore, that expression for the purposes of the BST and the CST Act has to be understood accordingly. The clearance of goods for home consumption is dealt with by section 47 of the Customs Act, 1962, but storage of imported goods in warehouse only because they are not cleared after unloading having been dealt with by the Customs Act, 1962 and particularly section 48 thereof, does not mean that for the purposes of the CST Act the goods have not crossed the customs frontiers of India. This is not a case where the deeming fiction in sub-section (2) of section 5 of the CST Act operates. Admittedly, this is not a case of a sale of goods occasioning the import, but what is claimed is that the sale is effected by transfer of documents of title to the goods before the goods have crossed the customs frontiers of India. This later part is also belied by the fact and as claimed by Mr.Sonpal that in this case, the bill of lading was issued on 15th September, 1995 and the bill of entry for the period 1995-96 for warehousing was filed on 13th November, 1995 and the agreement for sale has been executed thereafter. Once these are the admitted dates and events, then, this is not a case where the documents of title to the goods have been transferred before the goods have crossed the customs frontiers of India. This is, therefore, a local sale. Once on the factual position, the dealer claims the transaction to be effected by transfer of document of title to the goods before clearance from customs authorities, then, it is evident that in the light of the discussion in the forgoing paragraphs about the legal provisions, particularly of the Customs Act, 1962 and the BST Act, the second limb of sub-section (2) of section 5 of the CST Act is not attracted. This argument is not acceptable, that the customs frontiers of India are not crossed until the goods find their free access into the country by crossing the outer limits of the area of customs station and it is possible only at the time of clearance by the customs authorities by making the payment of customs duty. This argument is not sound on facts and in law. Once we are of the firm opinion that the CST Act touches the concept of crossing the customs frontiers of India, which is distinct from customs barriers of India, then all the more we cannot agree with the counsel of the assessee. The question forwarded for our opinion is answered in favour of the applicant/Department and against the respondent/dealer - reference disposed off.
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