Fakkir Mohammed, J.
1. These revision petitions have been filed by the assessee against the common order passed by the Sales Tax Appellate Tribunal, Madras, dated 9th April, 1975, dismissing the appeals. The assessee is the Orwo Films dealing in import and sale of raw films. As against the total and taxable turnovers reported by the assessee for the assessment year 1969-70 as Rs. 1,32,16,137.40 and Rs. 1,08,96,732.95 and for the assessment year 1970-71 as Rs. 2,03,36,503.04 and Rs. 1,69,51,635.43, the assessing authority determined the taxable turnover slightly less than the reported taxable turnover because the assessee preferred its claim for higher exemption towards export sale. Subsequently during the overcheck of accounts it was noticed that the assessee had collected Rs. 60 to Rs. 70 per roll of raw films in the first instance and at the later stage at Rs. 20 per roll towards air freight charges in respect of sales of imported films. Therefore the assessing authority felt that the assessee should have included the air freight charges also in the total and taxable turnover. The assessee explained that the imports of raw films were made from the German Democratic Republic on import licence granted to the State Trading Corporation of India Limited which in turn had given a letter of authority in favour of the assessee, that the goods were to be sold at specified price under the direction of the State Trading Corporation, that the price fixed did not include the air freight charges as one of its components, since the price was fixed on the basis of f.o.b. price, normal sea freight and insurance including the service charges due to the State Trading Corporation, that the margin fixed was only the maximum and that only part of the quantity imported was lifted by air. It was further explained by the assessee that the normal sea freight alone may well be a pre-sale charge since it was part of the sale price, that the air freight had to be incurred as a special service at the request of the South Indian Film Chamber of Commerce, who had promised to bear the extra air freight charges and that accordingly in the invoice, the assessee had excluded the air freight charges from the sale price, showing the same separately without collecting any sales tax on the same. The Revenue did not accept the explanation and proposed to revise the two assessments by including the air freight charges collected by the assessee in the bills of sales as sale price and proposed an addition of 3,99,238.50 and Rs. 1,68,328 for the two assessment years respectively. The revenue did not accept the reply submitted by the assessee when the pre-assessment notice was served. The appeals filed before the Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal also failed. Hence these revisions. The Sales Tax Appellate Tribunal has extracted a specimen invoice raised by the assessee in favour of the purchaser and after considering the records and the documents had confirmed the view taken by the Revenue. In the specimen invoice dated 31st March, 1970, for the sale of 18 rolls, the net price has been shown as Rs. 2,775.56, sales tax at 15 per cent theron has been charged separately as Rs. 416.33, the air freight charges at Rs. 20 per roll has been shown below the sales tax as Rs. 360 for 18 rolls and after including the packing and forwarding charges of Rs. 27.76 the total invoice amount is shown as Rs. 3,579.65. When the learned counsel for the revision petitioner was enquired whether the price of Rs. 2,775.56 per 18 rolls included the shipping charges and other incidental charges incurred before sale under the above invoice, the learned counsel, after verification reported that it did include the shipping charges and other pre-sale charges. Admittedly, the imported film rolls have been sold by the assessee to the buyer in India and the film rolls cannot be said to have been sold outside India. The records reveal that after a part of the imported raw films had been shipped from Germany some urgency was felt by the film industry in transporting the film rolls into India and the assessee agreed to air lift part of the cargo on the undertaking given by them to bear the extra freight charges to be incurred by the assessee. The assessee admits that in normal circumstances the shipping charges will be included in the price of the raw film rolls sold. One more fact that is not in dispute is that the assessee while collecting the air freight charges at Rs. 20 per roll in the invoice has not deducted the proportionate shipping charges in the invoice and that the price collected by the assessee included the shipping charges as originally fixed and agreed to. Instead of transporting the cargo by ship, the seller/assessee has transported the same by air, incurring some extra freight charges over and above the normal shipping charges and the assessee had purported to collect the air freight charges as extra in addition to the shipping charges, though actually the assessee did not incur the shipping freight, but incurred only air freight. A careful consideration of the above facts reveals that the seller has or shall be deemed to have collected the air freight charges as a pre-sale service and not as any post-sale service charge.
2. In their letter dated 6th August, 1969, to the Indian Motion Pictures Export Corporation, Bombay, the assessee has expressed that the shipment of the raw film will take about 8 to 10 weeks from Germany to Bombay, that if the materials are imported by air, it would approximately take only three weeks and that if the Export Corporation was willing to agree on behalf of the purchasers to pay the air freight charges, the remaining raw film rolls could be air lifted to India. A similar letter was written by the assessee on 11th August, 1969, to the Raw Film Steering Committee, Madras. In their letter dated 11th August, 1969, addressed to the State Trading Corporation, New Delhi, the assessee has furnished information that if the raw film rolls are lifted by air as desired by the Raw Film Steering Committee, the Committee should bear an extra charge of Rs. 70 per roll. By letter dated 13th August, 1969, the assessee has written to their Bombay Office stating that 1,600 rolls had been sent already by steamer, that the Raw Film Steering Committee had asked to air lift 3,000 rolls and that necessary cable has been sent to the West German factory to air lift 3,000 rolls. Thus the expenditure had to be incurred at a pre-sale stage in the course of import from Germany and it is only at the sale point, the assessee had to collect the air freight charges from the purchaser.
3. In their letter dated 27th October, 1969, the assessee had requested a German exporter to air lift 3,000 rolls as the local film industry at Madras was prepared to bear the air freight charges. The intention seems to be that the exporter's price will include the air freight charges and that the same could be collected ultimately from the purchaser in the importing country. Otherwise, there was no need for the assessee to inform the exporter of the fact that the air freight charges will be paid as extra, since the air freight charges will be more than the shipping charges. Whatever it is, the price of the imported film rolls will include either the shipping charges or the air freight charges at the point of sale to the purchaser by the assessee. It is only in this treatment, the assessing authority and the appellate authority have included the air freight charges collected by the assessee in their invoices in the total and taxable turnovers for the two assessment years. No doubt, the assessee had requested to treat the air freight charges as special service charges for the services rendered to help the industry and not to treat it as pre-sale charge. There is no question of any service here since the act of import of the goods automatically involves the transport of goods whether it be by ship or by air and it is a pre-sale charge. If an article is imported by ship, the price will be less and if it is lifted by air, the price will be more. In that view, the air freight charges can only be viewed as a pre-sale charge and not as a charge for the rendering of any special service, since no special service is involved in importing the goods from a foreign country.
4. Another important fact that has to be noticed is that the assessee has not worked out the actual air freight charge for individual purchasers and on the other hand, the assessee has collected the air freight charges at a lump sum rate per roll of raw film, which fact runs counter to the plea that the collection of air freight by showing it separately in the invoice reflects any special post-sale service. In Dyer Meakin Breweries Ltd. v. State of Kerala : (1970)3SCC253 , it was held by the Supreme Court that all the expenditure incurred towards the freight and handling charges incurred prior to the sale was a component of the price for which the goods were sold and the assessee was not entitled to the deduction of freight and handling charges, simply because they were shown separately in the invoices or separate bills for ex-factory price and for freight and handling charges were prepared. In D. C. Johar & Sons (P.) Ltd. v. Sales Tax Officer, Ernakulam  27 STC 120 (SC) also, the Supreme Court has held that where the assessee purchased the goods in other State and transported them to its place of business, the assessee is not entitled to claim exemption of freight, packing and delivery charges simply because separate bills were made out for freight, packing and delivery charges. In State of Tamil Nadu v. Parry & Company  39 STC 122 a Bench of this Court has held that even though no written contract was produced, an agreement to deliver the goods in the Madras Port could be inferred and the freight charges including other charges shall be deemed to be pre-sale expenses incurred by the assessee and were liable to be included in the assessee's taxable turnover. The above judicial decisions directly apply to the present case. Thus, we do not find any material for giving a differential treatment to the air freight charges which were incurred by the assessee prior to the sale and towards the import of the goods by the assessee before the sale to the purchaser for the purpose of granting exemption from exigibility.
5. In the result, therefore, these revision petitions are dismissed, and the revenue will get its costs from the revision petitioner. Counsel's fee Rs. 250 one set.