Sports goods classification and export-sale exemption apply to football rubber bladders exported as part of finished footballs.

Football rubber bladders are treated as sports goods because they form an essential component of the football and are used in its manufacture and use. A sale of such bladders qualifies for exemption under section 5(3) of the Central Sales Tax Act, 1956 when the bladders are actually exported as part of the finished football and constitute the last sale preceding export. The analysis rejects denial of exemption on the ground that the exported goods were not in the same commercial form, and states that the turnover could not be taxed under the State trade tax law.

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Issues: (i) Whether football rubber bladders are sports goods. (ii) Whether the sale of rubber bladders used in footballs and exported as part of footballs is exempt under section 5(3) of the Central Sales Tax Act, 1956.

Issue (i): Whether football rubber bladders are sports goods.

Analysis: Rubber bladders used in footballs form an essential component of the football and are used in the manufacture and use of the sporting article. The classification adopted below treating such bladders as outside the category of sports goods was not accepted.

Conclusion: Football rubber bladders are sports goods.

Issue (ii): Whether the sale of rubber bladders used in footballs and exported as part of footballs is exempt under section 5(3) of the Central Sales Tax Act, 1956.

Analysis: Where the goods sold by the dealer are actually exported out of India as part of the finished exported article, the sale can qualify as the last sale preceding export. The football consists of the leather jacket, rubber bladder and lace, and export of the football carries the bladder with it. The requirement of export in the same commercial form was not accepted as a ground to deny exemption on these facts.

Conclusion: The sale was entitled to exemption under section 5(3) of the Central Sales Tax Act, 1956.

Final Conclusion: The turnover in question could not be subjected to tax under the State trade tax law, and the dealer succeeded in revision.

Ratio Decidendi: Where the goods sold are an integral component of an exported article and are actually exported as part of that article, the sale qualifies as the last sale preceding export and is exempt under section 5(3) of the Central Sales Tax Act, 1956.

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