TMI Blog1998 (2) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessment year 1977-78 on a total and taxable turnover of Rs. 5,07,529. The assessing officer, on examination of the records of the assessee found that the following inter-State sales of paper boxes to the extent of Rs.1,17,756 has escaped assessment under the provisions of the Central Sales Tax Act, 1956 (hereinafter to be referred to as the Act ). The said turnover was exempted in the original assessment treating the same as sales for export under section 5(3) of the Act. The assessing officer on the view that there was no evidence to establish that the paper boxes as such were exported in pursuance of the contract from the foreign buyers, proposed to revise the assessment and assess that part of the turnover of Rs.1,17,756 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot include the packing materials as packing goods were not the subject-matter of the contracts for export. He held that the goods which were exported under the contract between the exporter and the foreign buyer includes only the goods which were actually exported, but cannot be expected to cover packing materials involved in the export of such goods. The Appellate Assistant Commissioner placed reliance on an order of the Appellate Tribunal in T.A. Nos. 1696 of 1978 and 1762 of 1978 dated February 26, 1980 and held that the assessee was not entitled for exemption on the sale of the packing materials. In this view of the matter, he dismissed the appeal preferred by the assessee. 4.. The assessee carried the matter further by preferrin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption under section 5(3) of the Act. In this view of the matter, the Appellate Tribunal dismissed the appeal preferred by the assessee. The assessee has preferred tax case revision challenging the order of the Appellate Tribunal. 5.. Mr. S. Shanmugam, learned counsel representing Mr. C. Natarajan, learned counsel appearing for the assessee submitted that under the terms of the contract with the foreign buyer, the exporter had to export the frozen sea foods and the contract stipulated that the goods were packed properly. He, therefore, submitted that the packing materials sold by the assessee to the local exporter for packing the frozen sea foods were the items covered under section 5(3) of the Act, as the sale was made for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l part of the price of the export. In this situation, the question of exemption under section 5(3) of the Act has to be examined. Section 5(3) of the Act reads as under: (1) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the Customs frontiers of India. (2) ............ (3) Notwithstanding anything contained in sub-section (1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the sea foods is the proper packing and the sale by the assessee of the packing material is necessary to comply with the agreement for export. It is true that the contract for exports was for the frozen sea foods, but to comply with the export order, the assessee necessarily have to pack them in the packing materials and in our view, the sale of the packing materials was effected by the assessee for the purpose of complying with the agreement in relation to the export of Indian frozen sea foods. The expression, for the purpose of complying with the agreement or order for or in relation to such export in section 5(3) of the Act has to be given a natural import, and the packing materials, in our view, were sold by the assessee for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. case [1982] 51 STC 329 (Mad.) on the ground that the exemption in Packwell Industries (P) Ltd. case [1982] 51 STC 329 (Mad.) was claimed on the basis of the finding that the packing goods was the subject-matter for the contract of the export. This Court held that where the purchase order itself contemplates the subject-matter of the goods packed in a container of a particular specification, then the decision in Packwell Industries case [1982] 51 STC 329 (Mad.) would not apply. This Court further held that where the identity of the goods was established, the assessee would be entitled to claim exemption under section 5(3) of the Act. On the facts of this case, it is clear that the identity of the goods is not lost because of the packing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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