Excise ruling for Tata Steel to be reviewed

LEGAL DIGEST

The Supreme Court last week asked Cestat (Customs, Excise and Service Tax Appellate Tribunal) to reconsider its decision against Tata Iron & Steel Co, denying exemption in central excise duty on goods produced at its factory at Adityapur and sent to the main plant in Jamshedpur for repair and maintenance of transport equipment.

The court said the tribunal had not considered the crucial question in the proper perspective, namely, whether the Jamshedpur plant had failed to account for the goods received from the Adityapur unit.

The revenue department's grievance was that the company had not explained the actual use of the goods in reply to the three show cause notices.

 Sugar rebate can't be carried over

The Supreme Court has dismissed the appeal of a sugar mill claiming rebate in excess duty for excess production during a period when the central government had declared an incentive scheme.

The purpose of the policy was to encourage production of sugar during the lean months. In this case, Sidheshwar Sahakari Sakhar Karkhana vs Union of India, the mill produced excess sugar during one relevant year.

But it did not produce sugar for the next two years. The mill claimed rebate for the three years. The authorities ignored the nil years in taking the average production and denied the claim of the sugar mill.

The Bombay High Court did not interfere with the finding of the authorities. On appeal, the Supreme Court rejected the claim of the sugar mill.

It further stated that the grant of rebate, exemption or concession was in the nature of government policy and the court would not interfere in them normally.

 Spare the vitamin-rich animal feed

The Supreme Court has dismissed the appeal of the Commissioner of Central Excise against the Cestat order which had held that the animal feed produced by Abhi Chemicals & Pharmaceuticals Ltd was not taxable.

The product was meant for consumption by animals only. It consisted of a mixture of vitamins, minerals, anti-oxidants and stabilisers. The intermixture of vitamins is not fit for human consumption.

The Supreme Court held that products which have mixture of vitamins and minerals with addition of other ingredients and which are used for animal feed should be classified under Chapter heading 2302 which are not liable to duty.

 Resignation not liable to acceptance

The Supreme Court overruled the Punjab & Haryana High Court which had held illegal the termination of services of an employee of State Bank of Patiala who had withdrawn his resignation before the bank accepted it.

According to the high court, the bank had no legal authority to relieve him as the resignation was withdrawn much before the stipulated date of acceptance. The widow of the employee thus got higher benefits.

The bank appealed to the Supreme Court. It allowed the appeal and said that the deceased had never questioned the acceptance of the resignation in his lifetime and, in fact, had accepted the terminal benefits.