Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Once a manufacturing activity is undertaken for manufacture of excisable goods, manufacturer is required to obtain a licence from Central Excise department under Rule 174 of Central Excise Rules and if any manufacturing activity is undertaken without a licence from department, there is a contravention of Central Excise Rules and excisable goods so manufactured are liable for confiscation: CESTAT

THE assembly of car from the component parts amounts to manufacture under Section 2(f) of the Central Excise of the Act and excise duty is liable to be charged on such assembly. There is no dispute on this point that the activity of assembling of the car by the appellant amounts to manufacture. Once a manufacturing activity is undertaken for manufacture of excisable goods, the manufacturer is required to obtain a licence from the Central Excise department under Rule 174 of the Central Excise Rules and if any manufacturing activity is undertaken without a licence from the department, there is a contravention of the Central Excise Rules and the excisable goods so manufactured are liable for confiscation under Rule 173Q(1)(c) as existing at that time.

Income Tax

Whether when assessee incurs heavy litigation expenses to remove encroachment, income from sale of such land is to be taxed as capital gains or income from business - Capital gains, rules Bombay HC

LATE F.E.Dinshaw, who was a partner in a firm of Solicitors and a financial adviser to the Princely State of Gwalior, purchased large tracts of land admeasuring about 2500 acres at Malad and Borivali in or about 1923. He died in 1936 and was survived by a son, E.F. Dinshaw, and a daughter, Bachoobai Woronzow, both of whom were non-residents and were citizens of a foreign country. Upon the death of F.E.Dinshaw, his son and daughter became joint owners of the lands. No physical division was carried out. Under the last will and testament of F.E. Dinshaw, a life interest was created in half his share in the land in favour of his daughter, Bachoobai, a reversionary interest being created in favour of two U.S. based charities. By a judgment of the Court dated 21 December 1972, Mr.Nusli Wadia was appointed as sole administrator of the estate. The other half share was bequeathed to E.F.Dinshaw.

The AO in the course of the assessment held that there was a steady, systematic and continuous process of selling portions of the property for making profits in real estate.

Customs

For levy of Customs duty goods have to be assessed "as presented before Customs": CESTAT

THE case under consideration is one of re-importation, i.e whether the goods exported were re-imported as such or the goods re-imported were different from those exported. The goods under export were chassis fitted with engine, while the goods imported were fully built buses along with standard fittings and equipments. These two goods are not one and the same and therefore the condition for availing benefit of notification 94/96 that the goods are the same which were exported is not satisfied.

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