2010 (9) TMI 879 - SUPREME COURT

Whether assessee (local manufacturer) is eligible to get exemption under sub-section (3) of section 5 of the Central Sales Tax Act, 1956 (for short "the CST Act"), if the penultimate sale effected in favour of the exporter is inextricably connected with the export of goods outside the territory of India - communication between the foreign buyer and the exporter reveals that the foreign buyer wanted the bus bodies to be manufactured by the assessee under the specifications stipulated by the foreign buyer. The bus bodies constructed and manufactured by the assessee could not be of any use in the local market, but were specifically manufactured to suit the specifications and requirements of the foreign buyer. In the purchase order placed on the assessee by the exporter, it is specifically indicated that the bus bodies have to be manufactured in accordance with the specifications provided by the foreign buyer, failure to do so might result in cancellation of the export order. The assessee in this case has succeeded in showing that the sale of bus bodies have occasioned the export of goods. When the transaction between the assessee and the exporter and the transaction between the exporter and foreign buyer are inextricably connected with each other, in our view, the "same goods" theory has no application, assessee is entitled to exemption under section 5(3) of the CST Act, appeals stand dismissed