Merchant trade

The High Seas Sale by transfer of documents of title to goods is covered by section 5(2) of the CST Act, 1956.

“S.5. When is a sale or purchase of goods said to take place in the course of import or export.

(1) …

(2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India.”

As per second limb, the sale effected by transfer of documents of title to goods before the goods crosses the Customs Frontiers of India are covered as sale in course of import. The term “Crossing Customs Frontiers of India” is defined in section 2(ab) as under.

“(ab) ‘’crossing the customs frontiers of India’’ means crossing the limits of the area of a customs station in which imported goods or export goods are ordinarily kept before clearance by customs authorities.”

Anurag Agencies Pvt. Ltd. (S.A.1506 & 1507 of 99 dt.31-3-2001) (M.S.T.Tribunal)

In this case Hon. M.S.T. Tribunal has held that if the Bill of Entry is presented by the High Seas buyer it is clear case that the seller has effected sale of goods to him prior to the clearing, as unless it is so sold buyer will not be in position to present the B/E in his name. Under above circumstances the claim of seller as sale in course of import is fully justified even if certain documents are not available.