Exemption certificate limits tax relief on packing material, while specifically covered goods and related interest relief were protected.

An eligibility certificate for an industrial unit does not automatically extend exemption to packing material sold with exempt finished goods, so tax on the packing material was sustained. By contrast, limestone specifically covered by the certificate remained exempt for the relevant period, and the levy on limestone was set aside. Interest was also held not leviable under the State sales tax law on dues arising under the Central Sales Tax Act, so that demand was deleted. The revision therefore succeeded only in part, with tax upheld on packing material but relief granted on limestone and interest.

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Issues: (i) Whether the sale of packing material along with exempt finished goods was taxable despite the eligibility certificate; and (ii) whether the sale of limestone was exempt under the eligibility certificate and whether interest could be levied on dues under the Central Sales Tax Act.

Issue (i): Whether the sale of packing material along with exempt finished goods was taxable despite the eligibility certificate.

Analysis: The eligibility certificate granted exemption for the industrial unit, but the exemption did not extend to packing material merely because it accompanied exempt finished goods. Sale of packing material remains independently exigible to tax, and allowing exemption on that component could result in an impermissible exemption beyond the terms of the incentive scheme.

Conclusion: The levy of tax on the packing material was upheld, against the assessee.

Issue (ii): Whether the sale of limestone was exempt under the eligibility certificate and whether interest could be levied on dues under the Central Sales Tax Act.

Analysis: Limestone was specifically covered by the eligibility certificate and was therefore exempt for the relevant period. As to interest, interest was not leviable under the Rajasthan Sales Tax Act for dues arising under the Central Sales Tax Act in view of the Supreme Court's ruling relied upon by the Tribunal.

Conclusion: The levy of tax on limestone and the levy of interest were set aside, in favour of the assessee.

Final Conclusion: The revision succeeded only in part, with tax sustained on packing material but relief granted on limestone and interest.

Ratio Decidendi: An exemption certificate for an industrial unit does not automatically exempt packing material sold with exempt goods, but specific items covered by the certificate remain exempt, and interest cannot be levied under the State sales tax law on Central sales tax dues where the governing legal position excludes such levy.

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