Customs to focus on principal use

LEGAL DIGEST

Where a machine is capable of performing two or more complementary or alternative functions, they have to be classified according to their principal use for the purposes the Customs Tariff Act, the Supreme Court has ruled in Western India Plywoods Ltd vs Collector of Customs.

In this case, the company imported a complement of pulp-making machinery, including motor vibrator with actuator.

According to the company, the function of the motor vibrator was to work in conjunction with the debfribrator and it constituted an integral part of the pulp-making machinery.

However, the department classified it as machinery having individual functions. Cegat upheld this point of view. The Supreme Court held it was wrong. The case was then remitted to the tribunal to consider all aspects, as some were not considered by the tribunal.

Ruling on HC's jurisdiction

The Supreme Court has emphasised in the judgment, Orissa Agro Industries Corporation v Bharati Industries, that when disputed facts are involved, the aggrieved party cannot move a high court directly, but must go to a civil court.

In this case, the corporation disposed of old machinery and Bharati Industries bought them through a tender. However, the two parties had disagreement about payment and Bharati moved the Orissa High Court alleging breach of contract.

The high court, while noting that it could not be moved if the facts were disputed, went to pass an order to the corporation to pay a certain sum to Bharati. Therefore, the corporation appealed to the Supreme Court. It set aside the high court judgment and underlined that high courts should not entertain writ petitions on breach of contract. Cegat judgment set aside

The Supreme Court has set aside the judgment of Cegat in Anand Nishikawa Co Ltd vs Collector of Central Excise. The excise authorities had alleged suppression of facts by the company with regard to the manufacture of rubber profiles.

The tribunal had ruled in favour of the authorities. The company appealed to the Supreme Court. It noted that the authorities had inspected the factory and was well aware of the process.

The correspondence between the company and the authorities also indicated that the department was aware of the facts. It also possessed the flow chart.

In view of all these, the department could not have initiated recovery proceedings under Section 11A of the Central Excise Act. The demand of the revenue department was, thus, time-barred, the Supreme Court said.

Onus on worker to prove employment

The Supreme Court has reiterated in Batala Coop Sugar Mills vs Sowaran Singh that it was for the worker who claims that he has worked for 240 days in 12 calendar months in an establishment to lead evidence for that purpose.

The onus cannot be shifted to the employer. In this case, the worker asserted that he was a regular employee and had worked for 240 days in the establishment and, therefore, he was entitled to protection under the Industrial Disputes Act.

He argued that his termination was illegal. On the other hand, the employer contended that he was a casual worker for the season. The Punjab government referred the dispute to the labour court.

It directed his reinstatement because the employer could not produce the attendance record and other evidence on its behalf. The high court upheld this ruling. The sugar mill successfully appealed to the Supreme Court.

Calcutta HC ruling on SBI worker overruled

The Supreme Court has held that State Bank of India had the discretion to retain the service of an officer for the purpose of proceeding against him departmentally.

This power has been given under Rules 20-A and 20-B of the service rules governing public sector banks. The Supreme Court overruled the Calcutta High Court which had taken a contrary view in SBI vs Bela Bagchi. In this case, the officer was facing a charge of fraud.

Disciplinary proceedings were initiated and they continued even after the date of her superannuation. The high court ruled that it was not permissible to continue the proceedings beyond the date of superannuation.

The bank appealed to the Supreme Court pointing out that the order of dismissal was passed during the extended period of service. The Supreme Court agreed with the bank and set aside the high court decision.