Press Release / News & Society / HC Stays Order In Favour Of Beach Mineral Company - VV MINERALS

HC Stays Order In Favour Of Beach Mineral Company - VV MINERALS

A beach sand mining company, in proceedings initiated against it by the Commissioner of Central Excise.

Justices V. Ramasubramanian and N. Kirubakaran granted the interim stay following a writ appeal preferred against the single judges order directing the Commissioner to decide the preliminary issue of jurisdiction, raised by the company, before proceeding with the show cause notice issued to it.

The show cause notice issued on December 26 last had asked the company to explain why it should not be directed to pay central excise for minerals such as ilmenite, zircon, rutile, sillimanite and leucoxene obtained by it between March 1, 2011 and March 1, 2014 after considering them as concentrates. Though the company filed a writ petition challenging the notice, the case was dismissed by the High Court on March 10 this year with a direction to the Commissioner to furnish to the company all relevant documents relied on by him for issuing the notice so that it could submit an effective reply.

Subsequently, the company filed another writ petition stating that it had obtained mining lease from the State government. It claimed that all its plants used for washing sea sand and extracting minerals from it would also fall under the definition of mines, and hence it was not liable to pay central excise, it claimed. The company also accused the Commissioner of denying access to many documents sought by it and refusing to decide the preliminary issue related to jurisdiction, raised by it on the basis of a 1995 notification which exempted certain goods from central excise, before proceeding with the notice.

Opposing the writ petition, the Commissioner denied the allegations levelled against him and claimed that the petitioner had demanded irrelevant documents such as Laboratory Analysis Reports and Test Certificates related to the minerals with the sole objective of prolonging the proceedings. However, the single judge rejected the Commissioners contentions and agreed with the company that all its plants fell under the definition of mines as per judgements passed by various civil as criminal courts in different cases related to the firm and hence the present writ appeal.

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