L.G. Balakrishnan Brothers Ltd. And ... vs State Of Tamil Nadu And Ors. on 6 June, 2000
(Kusum Laminating & Packaging Industries v. State of Tamil Nadu), the polythene bags used for packing barium sulphate were held to be in pursuance of contract, which contemplated packing and therefore, exemption was to be allowed under Section 5(3) of the Central Act. First of all, when the export order specifies the nature of packing and when the goods exported does not loose its character because of the packing, it was held that the claim of exemption under Section 5(3) of the Central Act could be extended in respect of packing material also, on the ground that it was for the purpose of complying with the agreement or order for or in relation to such export. But, in the cases before us, the buses, the subject-matter of export contract, came into existence as a new commercial commodity only after bodies were built on the chassis. As a result of body built, the character of the commodity itself changed as discussed supra. Therefore, the line of decisions pertaining to packing materials, are not relevant to the present cases.