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(b) "export turnover" means the sale proceeds, received in, or brought into, India by the assessee in convertible foreign exchange in accordance with Clause (a) of Sub-section (2) of any goods or merchandise to which this section applies and which are exported out of India, but does not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962);

(ba) "total turnover" shall not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962):

(B) That the words "goods" and "merchandise" appearing in Section 80HHC should be assigned the same meaning as is understood in the film industry since the said words have not been defined in the Act (C) That the word "goods", if taken in its ordinary dictionary meaning, would mean any article which can ordinarily come to market for being bought and sold The term "merchandise" would mean the goods which are normally bought and sold The term "goods" is much wider than the term "merchandise" The word "goods" means any movable property other than actionable claims and money It includes all the movable properties whether for trade or not The definition of the word "merchandise" as defined in the Law Lexicon, is a term covering all articles of commerce, the objects of commerce, the subjects of commerce and traffic, any article which is the object of commerce, or which may be bought or sold in trade, all kinds of personal property which can be bought and sold in the market, as such beta-cam tapes can be treated as goods or chattel under the Sale of Goods Act, 1930 (D) That Section 80HHC gives certain incentives for the export of goods out of India The main purpose is to augment the foreign exchange reserves of the country The incentive provision of tax laws, must be construed liberally, it being incentive provision (E) That the Bombay Sales-tax Act provides that any property, tangible or intangible, general or special, which can be transferred for a price, is "goods" In this view of the matter, exhibition rights in respect of films, which are transferable rights, could also constitute goods As such, export of exhibition rights can very well be covered by the phrase "goods" for the purpose of export under Section 80HHC (F) That under the Customs Act and also under the Indian Trade Classification (which follows the HSN system for classification) 'cinematographic items and tapes' have been termed as "goods" Chapter 37 specifically provides for the heading 'cinematographic and photographic goods' (G) That transfer of exhibition rights of a film constitute sale of goods and export of goods for the purposes of Section 80HHC In any case, it constitutes export of goods, as such entitled to relief under Section 80HHC (H) That the condition precedent to claim deduction under Section 80HHC is export of goods or merchandise out of India The term "export out of India" has been defined in Expln (aa) to Section 80HHC(4) to mean transaction of export out of India by way of sale or otherwise involving customs clearance at any customs station as defined under the Customs Act, 1962 The beta-cam tape was subjected to customs clearance when it was exported out of India as per the agreement of lease dt 29th March, 1995, as such, it was nothing but virtually a transaction of sale entered into by a person resident of India, engaged in the business of export of goods and merchandise and the export proceeds akin to sale proceeds were received by the assessee in convertible foreign exchange within a period of six months from the end of the previous year, therefore, the transaction in question fulfilled all the conditions required by Section 80HHC of the Act The assessee, therefore, was entitled to claim deduction under Section 80HHC of the Act (I) That the Tribunal misdirected itself in stating that there is no 'sale' In fact, the Tribunal did not look to the provisions of Section 80HHC in the right perspective Sub-section (3) as well as (4B)(baa) of Section 80HHC specifically refers to 'profits and gams of business or profession' and the same has to be computed in accordance with the provisions of Section 28 of the Act For the purposes of computing profits and gains of business and profession under Section 28, recourse to Rules 9A and 9B has to be taken into account and, according to Sub-rule (6) of Rule 9B the sale of the rights of exhibition of a feature film includes the lease of such rights or their transfer on a minimum guarantee basis "

(1) If goods are taken from India to outside India, it amounts to 'export'; in this context the following two provisions of Section 80HHG are that the export out of India shall not include any transaction by way of sale or otherwise, in a shop, emporium or any other establishment situated in India, not involving clearance at any customs station as defined in Customs Act, 1962. And it has been clarified in Explanation to Section 80HHC(2) that where any goods or merchandise are transferred by a taxpayer, to a branch, office, warehouse or any other establishment of the taxpayer situated outside India, and such transfer effected by the assessee shall be deemed to be export out of India. The value of such goods or merchandise declared by the assessee in the shipping bill or bill of export shall be deemed to be the sale proceeds of the goods for the purpose of allowing the deduction.

50. On the backdrop of the rival contentions, the question which needs dissection is as to whether the grant of right of exhibition of a feature film on lease amounts to sale of rights. Sub-section (1) of Section 80HHG only contemplates export out of India of any goods or merchandise by the Indian company or a person resident in India engaged in that business. Sub-section (1) by itself does not contemplate any transaction of sale. However, while defining the words "export out of India" it is said that it shall not include any transaction by way of sale or otherwise in a shop, emporium or any other establishment situated in India not involving clearance at any customs station as defined under the Customs Act, 1962. The concept is defined by using two negatives. Two negatives make the sentence positive. The positive meaning of the term, which is judicially recognised by the apex Court in the case of Silver Art Palace (supra) is that any sale of an article on counter shop, emporium or other establishment situated in India and if, ultimately, that article has been taken out of India subjecting it to customs clearance, it would amount to export out of India.