Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Re-export - Drawback claimed 22 days after statutory six months - Delay condoned - Refund ordered: HC

THE High Court was satisfied that there were reasons beyond the control of the petitioner. It is a case where delay should be condoned. Accordingly, High Court issued a writ of certiorari and quashed and mandamus is issued to make payment of Rs. 18,74,035/-. In case the aforesaid amount has been recovered by adjustment, the said adjustment will be treated as null and void. If any refund payment is to be made, the same will be made within a period of four weeks from the date copy of this order is received.

Income Tax

Whether when assessee obtains FIPB approval for prospecting diamonds, it can be said that its commercial operation began with prospecting activities without mining activities, and it is eligible to claim expenditure - YES, rules ITAT

THE assessee companies in India were all the subsidiaries of De Beers Mauritius Ltd, which had now merged and were known as De Beers India Private Limited. Each of the companies had commenced its operations in India after approval received from the Foreign Investment Promotion Board (FIPB) in October 1996, with reference to prospecting and mining of diamonds and other minerals (except coal and iron ore). The assessee was also granted permission by the Ministry of Industry for diamond prospecting. Consequently, the assessee obtained further permissions from the various state governments including that from the government of Andhra Pradesh for diamond prospecting in various areas of different districts in the state. According to the assessee, as its main activity was exploration and prospecting for diamonds, it had commenced its business operations since being incorporated and having obtained permission from the FIPB. Even though the mining activity had not commenced, its business of prospecting had as the assessee had undertaken prospecting activities during the year.

Central Excise

Garments stitched out of fabrics bought or brought by customers – Though process amounts to manufacture and goods are marketable, manufacturer is not liable to pay duty: CESTAT

THE Appellants were engaged in the manufacture of readymade garments with their brand name, and also stitching garments out of fabric bought by customers from their shop or brought by the customers from outside. The Appellants were paying excise duty on readymade garments which they got manufactured on job work basis by supplying raw materials to their job workers.

See our columns Tomorrow for the judgements