TMI Blog1991 (9) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... ax at 10 per cent. On appeal to the Appellate Assistant Commissioner, the assessee contended that certain goods were imported on the strength of the actual user's licence issued to and in favour of M/s. Kasturba Medical College, Manipal, and on the strength of the letter of authority issued by the Controller of Imports and Exports. On the College placing an order on the assessee, the assessee placed an order with the foreign suppliers for the supply of equipment. The consignment was cleared at Madras and then despatched from Madras to Manipal for delivery to the licensee (College). The assessee filed a copy of licence issued in favour of the Kasturba Medical College, the letter of authority issued by the Chief Controller of Imports and Expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity of contract between the College and the foreign seller. The import of the goods was caused as a result of the contract of the assessee with the foreign seller. Referring to Deputy Commissioner of Agricultural Incometax and Sales Tax v. Kotak Co. [1973] 32 STC 6 (SC) the Board observed, that the assessee in that case acted merely as an agent rendering service. The Board also held that there was no evidence to show that the assessee agreed to act merely as an agent notwithstanding the stipulation in the letter of authority issued by the Chief Controller of Imports and Exports. The Board therefore thought that the transaction would be governed by the ratio of the judgment in Binani Bros. (P.) Ltd. v. Union of India [1974] 33 STC 254 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement with I.I.T., Madras, for supply of machineries. I.I.T., Madras, applied and obtained import licence. Thereafter it obtained a letter of authority in favour of the licensee. On the basis of the letter of authority and the import licence, the assessee imported the machines and supplied them to the I.I.T., Madras. There also the letter of authority prohibited the disposal of the machines by the assessee to any one else except the I.I.T., Madras. In that case the agreement provided that the title to the machines remained with the assessee until the full purchase price, the transportation and importation charges were paid by the licensees. Notwithstanding the fact that the agreement provided for the title to remain with the assessee until ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction in the course of the import. We are of the opinion that the Board fell into an error when it says that the assessee did not act merely as an agent. The question whether the assessee acted only as an agent for the licensee or the assessee actually sold the imported goods to the licensee will essentially depend upon the facts of each case and the inference to be drawn from the circumstances of the case. As pointed out by the Apex Court in Deputy Commissioner of Agricultural Income-tax and Sales Tax v. Indian Explosives Ltd. [1985] 60 STC 310 the import on the basis of the actual user's licence and the condition prohibiting the diversion of the goods after the import would establish an integral connection and link between the transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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