Sate of Maharashtra Vs Castrol India Ltd (CESTAT Delhi)
CESTAT Delhi held that that movement of the goods from the mother warehouse of Castrol in the State of Maharashtra to the Clearing and Forwarding Agents [CFAs] located in other States are supplies in the nature of ‘Stock Transfers’, which fall within the scope of section 6A of the CST Act.
Facts- The issue that had arisen for consideration before the Sales Tax Tribunal was whether the movement of goods from the mother warehouse of Castrol in the State of Maharashtra to the Carrying and Forwarding Agents in other States are supplies made in discharge of pre-existing purchase orders which fall within the scope of section 3(a) of the CST Act as claimed by the State of Maharashtra or are supplies in the nature of „Stock Transfers‟ which fall within the scope of section 6A of the CST Act as claimed by Castrol, which claim of Castrol has been upheld by the Sales Tax Tribunal.
Conclusion- Held that when stockyards/ warehouses are maintained in different States for the purpose of more effective and timely distribution of the goods then when goods are distributed from the stockyards/warehouses to the dealers from time to time, more particularly when the supply to the stockyards /warehouses is a continuous process and not related to the requirement of any particular customer or order placed by the customer and the appropriation of goods are made out of the stocks available in the stockyards/ warehouses, the supplies made to the stockyards /warehouses by the manufacturer cannot be termed as inter-State sales. The supplies made from the stockyards/warehouses to the Distri butors would be a local sale in the State where the stockyards/warehouses are situated. Until the goods are appropriated by the stockyards/warehouses from out of the stocks available with them, they continue in the inventory of the stockyards/warehouses. Thus, supplies made to the stockyards/warehouses are merely stock transfers.
