Seismic tapes get Customs exemption

LEGAL DIGEST

The Supreme Court has granted Customs exemption to 3-D seismic tapes containing oil exploration data and set aside a ruling of the Customs, Excise & Service Tax Tribunal in the judgment, ONGC Ltd versus Commissioner of Customs.

ONGC obtained the services of SEDCO Forex Int Drilling Inc for exploration of oil and gas. The question arose whether the data, which are admittedly "goods," would get duty exemption.

For this, an "essentiality certificate" from the director-general of hydrocarbons and a petroleum exploration licence was necessary.

In this case, ONGC got the documents late and therefore, the Customs commissioner issued it a notice. Setting it aside, the Supreme Court stated that exemption notifications should be read in a liberal manner, as had been ruled in several recent cases.

Bihar finance corp appeal allowed

The Supreme Court has allowed the appeal of the Bihar State Financial Corporation challenging an order of the Patna High Court directing it to advance Rs 15 lakh to a small-scale unit, Chemicot India Pvt Ltd, for expansion.

The Supreme Court stated that ordinarily, the court should not interfere in a decision by a statutory corporation. But in this case, an additional subsidy had been promised and normally, it should have been given.

However, since the unit was said to be in poor financial shape, it would be futile to pay the amount, the Supreme Court said.

Tribunal to decide on trademark

The Supreme Court has asked the Central Excise Appellate Tribunal to decide the relevance of trademark registration in claiming small-scale excise exemption.

The direction was given in the case, Reiz Electrocontrols Pvt Ltd versus Commissioner of Central Excise. Reiz Enterprises has been producing electronic switches under the brand name Reiz since 1988.

In 1993, the proprietor, along with two of his brothers, formed another firm, Reiz Electrocontrols Pvt Ltd for manufacturing electronic transformers.

Both firms used a common brand name, Reiz, for their goods. The excise authorities denied the exemption under notification NO 1/93, which said that a manufacturer affixing the brand name of another person was not ineligible.

Insurer to prove owner's negligence

The Supreme Court, in Lal Chand versus Oriental Insurance Co Ltd, said that if a driver with a fake licence caused a motor vehicle accident, it was for the insurance company to prove that the owner was negligent in appointing him. In this case, the owner of the truck examined the driving licence and gave the driver a test.

However, he caused an accident. The tribunal awarded damages and asked the insurer to pay. The high court allowed the insurer to recover the amount from the owner. He appealed to the Supreme Court, which asked the insurer to take the liability on the above principle.