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11. On the matter being taken in the first appeal, the pleas and contentions made before the AO were repeated and reiterated in the appeal. Emphasis was laid in those appellate proceedings on the fact that it were the assessees goods which were exported and it was the assessee who had derived profits from the export and, therefore, it was the assessee who could only be treated as exporter and should be held entitled to deduction under s. 80HHC. In this connection, reference was also made before the learned CIT(A) to the definition of export under s. 2(18) of the Customs Act, 1962 and the definition of the term exporter within the meaning of s. 2(20) of that Act. As regards the receipt of the convertible foreign exchange against the sale proceeds of the goods sold, it was contended that since USSR was a bilateral account country, the remittance received in rupees from Russia could also be treated as convertible foreign exchange as per the Press Note issued by the CBDT dt. 22nd June, 1983. Emphasis was also laid on the FOB price stipulation in the purchase order placed by the Span on the assessee and it was contended that the assessee had reimbursed the expenses made by the Span in connection with pre-shipment and inspection of the goods, premium paid to Export Credit Guarantee Corporation Ltd., the collection charges and interest to bankers. According to the assessee, since the FOB, Bombay price was quoted, it was not a local sale. Had there been a local sale, there would not have been any question of quoting price FOB, Bombay. Before the learned CIT(A), an entirely new plea was made to the effect that there were minutes of meetings held on 1st Jan., 1990 and 5th Jan., 1990 between the representatives of the assessee and the Span and it was agreed in the meeting dt. 5th Jan., 1990 that an agency agreement would be signed in a maximum period of one week. This new plea was sought to be proved with the assistance of copies of the minutes produced before the learned CIT(A). At this stage, it would be necessary to point out that neither the assessment order shows that these minutes were filed or produced before the AO nor any reference was made in the assessment proceedings to the minutes dt. 1st Jan., 1990 and 5th Jan., 1990 and the minutes thereof. It is, however, an admitted position that no agency agreement or any other agreement pursuant to these minutes was ever executed between the assessee and the Span. A pointed reference was also made to the fact that the price of the goods exported mentioned in the Russian buyers contract agreement was Rs. 3,96,26,082 and the same price was mentioned in the purchase order placed by the Span with the assessee. According to the assessee, no trader in goods would pay a purchase price equal to the sale price of the goods exported. The fact that for Span both the purchase and sale price was the same and the Span was entitled only to a commission indicates that the Span was merely a commission agent of the assessee and not an exporter in its own right. One contention raised before the learned CIT(A) and accepted by her was that the Form No. 14B under the ST Rules was furnished by penultimate seller to ultimate seller. Since it was so done in the present case, it indicated that the Span was an agent and not a principal or an exporter. So far as the tax law is concerned, reliance was placed before the learned CIT(A) on the decision of the Andhra Pradesh High Court in the case of CIT vs. K. S. Subbaiah Pillai & Co. P. Ltd. (1972) 85 ITR 71 (AP) and the decision of the Delhi High Court in the case of Ferro Alloys Corpn. Ltd. vs. R. C. Mishra, Director of Tax Credit (1978) 114 ITR 753 (Del).

16. On behalf of the assessee, the same pleas were raised and contentions made as were raised and made in the first appeal. The learned counsel for the assessee, however, stated that the most important aspect of the case was as to at what point of time, the transfer of title in the goods exported took place. According to the learned counsel, since in the present case the goods were sold FOB, Bombay, the title in the goods continued to vest in the manufacturer, i.e., the assessee, till the goods were placed on board the ship. Since this event of loading the ship on board in terms of FOB stipulation took place after the goods had crossed the customs frontiers of India, it was the assessee who made the export of the goods. In this connection, the learned counsel referred to the definition of export as given in the Imports and Exports (Control) Act, 1947, the Customs Act, 1962 and contended that since the delivery of the FOB and the delivery took place after crossing by the goods of the customs frontiers, it was the assessee who exported the goods. According to the learned counsel, since it was the assessee who had furnished the Bond to the Central Excise authorities in connection with the export of the goods, it was the assessee who should be treated as the exporters. In this connection, he referred to the dictionary meaning of the term FOB as given in the Blacks Law Dictionary and Jowitts Dictionary of English Law, and also the decision of the Supreme Court in the case of Mineral & Metal Trading Corporation vs. R. C. Mishra & Ors. (supra), the decision of the Andhra Pradesh High Court in the case of CIT vs. K. S. Subbaiah Pillai & Co. P. Ltd. (supra), and the decision of the Cochin Bench of the Tribunal in ITA No. 1220/86 [Sea Pearl Industries vs. ITO (1988) 30 TTJ (Coch) 456] a copy whereof is available at pages 100 to 120 of the assessees paper book. He also discussed the general meaning of the word commission with reference to the dictionaries of Black and Jowitt and the judgment of the Bombay High Court reported in Harihar Cotton Pressing Factory vs. CIT (1960) 39 ITR 594 (Bom). He further contended that there was only one price mentioned both in the contract agreement between the Russian buyer and the Span as well as in the purchase order issued by the Span in favour of Rifox. This indicated that there was no separate sale by Rifox to the Span and Rifox itself had exported the goods on payment only of commission to the Span. Had it been a sale by the Span to Russian party, then the Span would have appropriated whole price received from the Russians. The fact that the other export benefits were also shared by both the Span and Rifox also indicated that it was a case of principal and agent and not of two principals. The learned counsel also claimed that the Russians were directly in touch with the Rifox before any agreement took place between the Russians and the Span. Shri Shivnani in entering into contract with Russians was in fact acting on behalf of the Rifox as their agent. In relation to the assigning of the contract on back to back basis, the learned counsel referred to s. 63 of the Contract Act and contended that since the assignment of the contractual rights by the Span to Rifox was not objected to by the Russians, they shall be deemed to have dispensed with or remitted their rights under the contract. As regards the three documents, namely, AR 4A Form, Gate Pass (GP 2) and the Bond (B. 1), the learned counsel conceded that the Form AR 4A and the Gate Pass GP 2 are invariably issued by a manufacturer irrespective of whether he is or is not an exporter. These two documents, therefore, have no bearing on the question as to who was the exporter. He, however, contended that Bond B1 is furnished only by an exporter and since in the present case the Bond was furnished by the assessee, it should be held to be an exporter. As regards the sales-tax aspect of the matter, the learned counsel conceded that where there is no domestic sale involved, sales-tax liability is not there and it was not necessary to issue or furnish certificate in Form No. 14B. This was a mistake. He further conceded that the learned CIT(A) had committed an error in observing and holding that the Form No. 14B is furnished by a penultimate seller to an ultimate seller and it was done so in the present case. According to the learned counsel, the furnishing of Form 14B is furnished by a penultimate seller to an ultimate seller and it was done so in the present case. According to the learned counsel, the furnishing of Form 14B in the present case was not at all necessary. These provisions of the ST Act and the provisions made therein are directory in nature. Therefore, issue of Form No. 14B in the present case was not significant and could not have any material bearing on the question as to whether or not any domestic/local sale took place in India. He further contended that in view of the fact that the nature of the transaction was clearly shown by the documents, it was not necessary for the AO to have orally examined the witnesses. As regards the production of the minutes of the meetings dt. 1st Jan., 1990 and 5th Jan., 1990, the learned counsel stated that even though these documents were not produced or filed before the AO during the assessment proceedings, yet they were there on the file of the assessee which files were produced before the AO. On the other aspects of the case, the learned counsel cited the following Court decisions :

X. Delivery/Transfer of property in goods :

28. Another aspect on which emphasis was placed by the learned counsel for the assessee related to the transfer of property in goods. The learned counsel contended that the property in the goods is transferred to the purchaser only when the delivery is made. In the present case, as per the Purchase Order dt. 25th Dec., 1989 placed by Span with Rifox, the price was FOB Bombay. As per the cl. 2.3 of the contract between the Russian party and Span also the price was FOB Bombay. According to the learned counsel, the fact that the price was fixed as FOB Bombay indicated that the goods stood delivered only when they were placed free on board the ship. In other words, the property in the goods passed on to Span in India or the Russian party only when they were placed on board the ship. The goods were placed on the board only after they had crossed the customs frontiers of India. Till then the property in goods continue to vest in Rifox who had manufactured the goods. Since the property in the goods had vested in Rifox till the goods crossed the frontiers of India, it should be held that it was the assessee who had exported the goods from India. In this connection, the learned counsel referred to the definitions of export and exporter in cls. (18) and (20) respectively of s. 2 of the Customs Act, 1962 and the definitions of Customs Station and Import and Export given in cls. (e) and (g) of s. 2 of the Imports and Exports (Control) Act, 1947. With the assistance of these definitions, the learned counsel sought to establish that in the present case it was the assessee Rifox who had exported the goods. In this connection, the learned counsel also referred to the meaning of FOB according to the Blacks Law Dictionary and Jowitts Dictionary of English Law, the relevant extracts whereof have been made available at pages 21 and 24 of the assessees paper book. These meanings read as under :

"Blacks Law Dictionary :
FOB. Free on board some location (for example, FOB shipping point; FOB destination); the invoice price includes delivery at sellers expense to that location. Title to goods usually passes from seller to buyer at the FOB location.
Jowitts Dictionary of English Law :
FOB. These letters, which mean "free on board" indicate, when sued in a contract relating to the sale of goods intended to be sent by sea, that the seller is bound to deliver the goods on board ship free of cost to the buyer."