Judgment :- JAYASIMHA BABU, J. The question raised in these cases concerns the applicability of section5(3) of the Central Sales Tax Act, 1956 to the sales effected by the assessee, the Indian Textile Paper Tube Company Limited to Star Textile Engineering Works, Bombay, which company was a part of consortium formed for the purpose of supply of machinery erection and commissioning the same for a textile spinning project in Dar-es-Salam, Tanzania. 2. The claim for exemption had been initially allowed but was subsequently disallowed after reassessment. The assessment years in question are the years 1979-80 and 1980-81. The Sales Tax Appellate Tribunal by its order dated February 8, 1985 on the assessee's Appeals Nos. 746 and 747 of 1984 has upheld the orders of the reassessment. The amount of the disputed turnover for the year 1979-80 is Rs. 3, 24, 490 and for the year 1980-81 the amount is Rs. 1, 32, 840. 3. The value of the project in Tanzania for which machineries were to be supplied was Rs. 7, 71, 786.50. A memorandum of commitment was entered into on August 4, 1977 at Dar-es-Salam between National Textile Corporation of Tanzania (TEXCO) and the Textile Machinery Manufacturers' Association of India on behalf of the consortium of textile machinery manufacturers comprising of Lakshmi Machine Works Ltd. (LMW), NMM, TEXMACO, TEXTOOL, STAR, MMC and NSC. This was followed by an agreement dated April 29, 1977 between Textile Machinery Manufacturers' other Association, Lakshmi Textiles Exports Limited and other companies mentioned earlier whereby Lakshmi Exports Limited (Lakshmi) was appointed as the leader of the consortium for finalising and entering into contract with TEXCO "on behalf of consortium of 8 machinery manufacturers and Lakshmi for supply and services to be rendered for setting up a complete textile project in Dar-es-Salam United Republic of Tanzania" * . The members of the consortium by the said agreement undertook to supply equipment and services as set out in clause 6 of the agreement at f.o.b. prices mentioned therein. The equipment to be supplied by Star Textiles Engineering Works Ltd., one of the 8 consortium members, are also listed in clause 6 of that contract. The members of the consortium by the said agreement undertook to supply equipment and services as set out in clause 6 of the agreement at f.o.b. prices mentioned therein. The equipment to be supplied by Star Textiles Engineering Works Ltd., one of the 8 consortium members, are also listed in clause 6 of that contract. The technical know-how fees of rupees thirty-five lakhs for the project was to be payable exclusively to Lakshmi as it undertook to complete the whole of the project and supply know-how for the execution and implementation of the project work and to be responsible for all matters with TEXCO for setting up the entire project as a single unit. 4. It was also provided in the agreement that Lakshmi was to extend payment facility to be entered with TEXCO and that the individual members of the consortium were to be entitled to get cash subject to the individual members of the consortium agreeing to joint bank of Lakshmi and IDBI, extending credit to Lakshmi against the contract of TEXCO, the export resulting from the contract between Lakshmi and TEXCO yet to be entered into at that stage, was to be regarded as the success of the consortium. Clause 18 of the agreement provided that subject to force majeure, contract as entered into by Lakshmi with TEXCO shall be binding on all the parties forming consortium. Clause 19 provides for separate agreement/contract/to be entered into within a period of three weeks after signing of the main contract with TEXCO. Such contracts were to be by way of back to agreement between Lakshmi and members of the consortium detailing the actual scope of supply and services, penalties for delay in deliveries, performance guarantees, etc. 5. On August 4, 1977 Lakshmi entered into a contract with TEXCO. The preamble to that contract sets out that a cotton spinning mill at Ubunge Dar-es-Salam having 36, 960 ring spinning spindles, and the capacity to produce approximately three million kilograms of No 40's combed and No 20's carded cotton yarn per annum on the basis of three shifts of 7/12 hours each, and three hundred working days a year was to be set up, for which Indian machinery and equipment, including air-conditioning and electrical equipment was to be used. It is further recited that the Textile Machinery Manufacturers Association of India had represented to TEXCO that TMMA are capable of organising a viable consortium of Indian textile machinery manufacturers possessing the necessary expertise and experience to supply the machinery and the services for setting up the entire mill as per the requirements of TEXCO. A further recital was made in the agreement that TMMA after negotiations had reached and understood with TEXCO, and consequently TMMA had made arrangements with the various members of consortium of Indian textile machinery manufacturers, for the supply of machinery and technical services to TEXCO, and that Lakshmi was the leader of the consortium and as such it would be prime contractor to enter into contract with TEXCO. Any alteration, amendment or modification or annulment of the agreement was made subject to prior approval in writing of TMMA and TEXCO. 6. The agreement provides for the sale by Lakshmi to TEXCO of the machinery and services set out in detail in that agreement. Clause 23.1 of the agreement makes provision for assignment. Both TEXCO and Lakshmi were given right to assign their respective individual rights, in whole, or in part to any one or more parties subject to the assignor continuing to remain liable to other party to the contract jointly and severally with the assignee. 7. On January 9, 1978 Star Textile Engineering Works Limited (STAR) entered into an agreement with Lakshmi Textile Exporters Ltd., pursuant to clause 19 of the agreement among TMMA, by which the 8 machinery suppliers who formed the consortium were required to enter into agreements with Lakshmi Textile Exporters Limited. This agreement of January 9, 1978 in its preamble refers to the earlier agreement of April 29, 1977 as also the agreement dated August 4, 1977 between Lakshmi and TEXCO. The object of the contract is said to be delivery by STAR to TEXCO on account of Lakshmi, the goods f.o.b. Indian ports at the prices set out in the annexures to the agreement. It was also to erect, commission and carry out tests at the project site. The price was to be paid based on the agreement between Lakshmi and TEXCO after deducting therefrom, the commission at the rate mentioned in clause 2. It was also to erect, commission and carry out tests at the project site. The price was to be paid based on the agreement between Lakshmi and TEXCO after deducting therefrom, the commission at the rate mentioned in clause 2. In article 7 dealing with erection, it was provided that TEXCO had agreed to provide at its expense, adequate Tanzanian support labour as may be necessary to facilitate the erection and commissioning of the mill, at the request of Lakshmi's technical specialists group, as also the cost of economy class air travel to and from Tanzania and suitable lodging for the Indian technical specialists and other facilities. 8. Article 14 provides that the property in the goods agreed to be exported by STAR to TEXCO on account of Lakshmi shall remain with STAR, and would pass on to TEXCO only after the goods have actually crossed the customs frontier of India. Article 14(ii) reads as under : "The property in the goods agreed to be exported under - a. this contract shall remain with STAR and shall not be passed to TEXCO until after the goods have actually crossed the customs frontier of India; and b. STAR shall transfer the documents of title to the said goods to TEXCO only after the goods have actually crossed the customs frontier of India." * Article 15 of the agreement provides that all drawbacks of excise and customs duties, export incentives, benefits if any, that may be granted by the authorities concerned from time to time on the exports effected by STAR will belong to and be claimed directly by STAR, which was agree to surrender to Lakshmi on mutually agreeable terms, any percentage of their import entitlements, if required to meet the imports of machinery and components under the "foreign agreement". Article 13(iv) of the agreement dealing with arbitration provides that any dispute between Lakshmi and Star in respect of matters which may be, can be, and/or are subject to dispute between Lakshmi and TEXCO then notwithstanding what is stated in the parts of the contract sub-dispute shall be settled in accordance with the basis of award/settlement/order in such dispute with TEXCO, and such awards/settlement order passed shall be final and binding on STAR. 9. 9. The agreement between STAR and Lakshmi clearly provides that property in the goods shall remain with STAR until the goods cross the customs frontier of India, after which the property will vest in TEXCO, and the benefits of the export are to be received by STAR. 10. These provisions in the agreement considered in the background of the formation of consortium of textile machinery supplies, such consortium having been formed for the specific purpose of supply of machinery for the project in a foreign country, which project was to be completed with supplies for Indian machinery manufacturers can only lead one to conclude that the goods sold by STAR for the purpose of this project, were sold by it an the course of export. The property in the goods having remained with STAR till the goods crossed the customs frontier of India and thereafter in TEXCO. That fact that under the arrangement between STAR and Lakshmi embodied in the agreement the payment was to be received by STAR from Lakshmi does not militate against STAR being recognised as the exporter of the goods, and the goods as having been sold by it in the course of export. The payment for the goods was to be received only after the goods were exported. Lakshmi as the leader of the consortium was under an obligation to enter into an arrangement with other members of the consortium and secure supply of machinery from them to the TEXCO. The items to be supplied by each member of the consortium had been set out in some detail in the agreement dated April 29, 1977 by which Lakshmi was appointed as the leader of the consortium. 11. The substance of the transaction involving STAR clearly is that there was to be export of textile machinery for the purpose of installation, erection and commissioning in Tanzania. The fact that the details of this arrangement are set out in more than one document and that all documents have to be looked into for the purpose of gaining a comprehensive view of the transaction does not make STAR any less exporter of the goods manufactured by it and exported to Tanzania where it was to be erected and commissioned. 12. Section 5(3) of the Central Sales Tax Act exempts last preceding sale or purchase occasioning the export of those goods out of the territory of India. 12. Section 5(3) of the Central Sales Tax Act exempts last preceding sale or purchase occasioning the export of those goods out of the territory of India. The sale or purchase of goods antecedent to export sale is to be treated as a purchase/sale in the course of export provided such last sale took place after and for the purpose of complying with agreement or order or for in relation to such export have goods. 13. In these cases, the disputed turnover had initially been executed by granting to the assessee the benefit of section 5(3) of the Act. The only reason for denying that exemption, as set out in the order of the Appellate Tribunal is, that the agreement between STAR and Lakshmi was entered into more than three weeks after the date of agreement between Lakshmi and TEXCO. That the assessee had supplied the goods to STAR for the purpose of complying with STAR's agreement with Lakshmi, and those goods had been exported, has been assumed in the orders made by the authorities below. We must therefore proceed on the basis that the assessee had in fact supplied the goods which were required for the project, and those goods were supplied by STAR and were exported to Tanzania. 14. The formation of the consortium was for the specific purpose exporting Indian textile machinery to Tanzania for utilisation in cotton mill to be erected there. Having regard to the magnitude of the project, it was considered necessary to form a consortium which included 8 machinery manufacturers, STAR in one of those is mentioned in the very first commitment entered into by the Textile Machinery Manufacturers' Association. The supplies made by STAR were solely for the purpose of fulfilling the collective obligation which was initially undertaken by the Textile Machinery Manufacturers' Association and by arrangement among the members, embodied in the agreement between the leader of the consortium Lakshmi and TEXCO. The benefit of the exemption under section5(3) of the Act has been given by the Parliament to those who engage in export so that the goods exported from this country can be competitive in the international market. If the essential tests laid down in section5(3) of the Central Sales Tax Act are satisfied, the assessee would be entitled to receive the benefit. 15. If the essential tests laid down in section5(3) of the Central Sales Tax Act are satisfied, the assessee would be entitled to receive the benefit. 15. Counsel for the assessee rightly placed reliance on the recent decision of the apex Court in the case of C.T. Ltd. v. Commercial Tax Officer 1996 (8) AD(SC) 386, 1996 (10) JT 58 , 1997 (104) STC 94, 1996 (8) Supreme 121 , 1996 (7) Scale 865 , 1996 (10) SCC 729 . That was a case where the STC had entered into a contract with the Government Trading Corporation of Iran (Iranian buyer) and thereafter had entered into an agreement with C.T. Ltd., for supply of goods which STC had undertaken to supply to Iranian buyer. The report were effected by C.T. Ltd., marked as "A/c STC". The claim made by a supplier to C.T. Ltd., claiming benefit of section 5(3) on the ground that the goods so supplied were supplied after the contract between STC and C.T. Ltd., came into existence and for the purpose of fulfilling the same having been rejected by the Tribunal, the assessee had gone on appeal. The Supreme Court reversed the decision of the Tribunal, after it was found that no term in the contract between the appellant and the STC clearly contemplated the sale, namely, the transfer of the property from the appellant to STC. The Supreme Court reversed the decision of the Tribunal, after it was found that no term in the contract between the appellant and the STC clearly contemplated the sale, namely, the transfer of the property from the appellant to STC. The indications in the arrangement had in fact been pointed to the contrary, namely (i) the requirement that the appellants should prepare all the documents required for negotiation and that the seller's official invoice should be in 5 copies; (ii) the tea export licence was that of the appellants; (iii) the invoice of the appellant showed the Iranian buyer against the column "sold to" and no objection in this regard was raised by STC; (iv) the duty drawback benefit accrued entirely to the appellants; (v) the bill of lading showed the Iranian buyer's Teheran bank as consignee of the tea shipped by the appellants; (vi) there was no endorsement on the bill of lading in favour of STC that would suggest the transfer of title to STC; the typing of the words "A/c STC" below the name and address of the appellants did not constitute an endorsement; (vii) there was no endorsement upon the bill of lading signed by or on behalf of the Teheran bank, which was the consignee, or the Iranian buyer. Therefore, the purchase of the tea by the appellants at the auctions, in fulfilment of the export obligation to the Iranian buyer was the penultimate sale in the course of export and was covered by the terms of section 5(3) and was exempt from payment of sales tax. 16. In this case also, it is evident from the terms of the contract between STAR and Lakshmi that there was no sale by STAR to Lakshmi at any point of time. The title to the goods was to vest in STAR till the goods crossed the customs frontier of India, after which the title was to vest not in Lakshmi but in TEXCO. All the export benefits were received by STAR and not by Lakshmi. The export documents were to be prepared by STAR. 17. The arrangement between STAR and Lakshmi was therefore not one which involved sale of goods to Lakshmi. The export by STAR to TEXCO on account of Lakshmi was not the penultimate sale preceding any export sale by Lakshmi to TEXCO, but was the export sale. The export documents were to be prepared by STAR. 17. The arrangement between STAR and Lakshmi was therefore not one which involved sale of goods to Lakshmi. The export by STAR to TEXCO on account of Lakshmi was not the penultimate sale preceding any export sale by Lakshmi to TEXCO, but was the export sale. Consequently the sale effected by the assessee to STAR for the purpose of fulfilling the obligation under the export sale contract between STAR and Lakshmi, goods being exported to TEXCO qualified as penultimate sale, and is entitled to the benefit of section5(3) of the Act. 18. Though it may appear at the first sight that the concept of penultimate sale implies, the existence of one export sale preceded by another sale to the exporter and thus involving only two transactions there can be in existence in cases such as those examined by the apex Court in the case of C.T. Ltd. 1996 (8) AD(SC) 386, 1996 (10) JT 58 , 1997 (104) STC 94, 1996 (8) Supreme 121 , 1996 (7) Scale 865 , 1996 (10) SCC 729 and in this case, the number of parties involved could be more than three, the foreign buyer, the exporter from India, and the supplier to exporter in India. In the case examined by the apex court (C.T. Ltd. v. Commercial Tax Officer (supra), referred to earlier there was a fourth party, namely, STC, which had signed the contract with the foreign buyer. Similar is the role played by the fourth party in this case, Lakshmi which had entered into the contract with TEXCO. 19. The Tribunal was in error in denying the benefit of section 5(3) to the appellants. These appeals are therefore allowed but in the circumstances without costs.