Jurisprudentiol – Monday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Income Tax

Income Tax - Sec 37 - PSC for oil exploration - Site restoration is integral part of petroleum operations which include exploration - Although expenditure propvision for such activities not allowable u/s 37 but to be considered while computing income u/s 115JA: ITAT

CRUDE oil is a precious resource for any country. To extract it, India has also come out with National Exploration Policy. Under this policy, all production sharing contracts (PSC) were approved by the Parliament. The issue before the Tribunal is - Whether site restoration is a part and parcel of petroleum operations which do not include oil exploration and development. The next question is whether the provision of expenditure made for site restoration can be said to be unascertained liability. Is the assessee eligible to claim it u/s 37(1) or the PSC being a special arrangement, the site restoration expenditure is to be considered while computing income u/s 115JA.

Customs

Customs – Settlement Commission - orders of the Settlement Commission are amenable to writ jurisdiction – Settlement Commission required to pass reasoned orders – High Court

THE Petitioners are 100% Export Oriented Unit (EOU), engaged in the manufacture of Vegetable extracts U/Chapter 13 of the Central Excise Tariff Act. The Petitioners being 100% EOU are required to obtain permission from Development Commissioner for clearing their goods to Domestic Tariff Area (DTA). They are required to pay Excise duty in the case of DTA clearance as per section 3 of Central Excise Act, 1944 and Customs Act and in any other law for the time being in force. The goods cleared by the Petitioners are oleoresin covered under tariff items chapter heading 1301.10. At the relevant time the duty liable to be paid by the Petitioners was : 30% basic Customs duty + 16% CVD + 04% SAD.

Central Excise

If there is any conflict between Tribunal's decision and Board's clarification, former will prevail – existence of sugar and distillery divisions as two distinct units within same factory would not ipso facto disentitle assessee – availment of duty paid on Molasses for payment of duty on Sugar not barred: CESTAT

THE assessee was engaged in the manufacture of sugar, molasses, rectified spirit, denatured spirit and Extra Neutral Alcohol (ENA) during the material period. They had two divisions, namely Sugar Division and Distillery Division. In the Sugar Division, sugar was manufactured and cleared on payment of duty. Molasses, a by-product, was removed from the Sugar Division, on payment of duty, to the Distillery Division where it was used in the manufacture of rectified spirit (exempted final product), denatured spirit (dutiable product) and ENA (dutiable product). Separate MODVAT accounts were maintained in the two divisions.

See our columns Monday for the judgements