Penalty on fan regulator firms waived

LEGAL DIGEST

The Supreme Court last week dismissed the appeals of fan regulator manufacturers, which claimed a lower excise tariff on accessories.

North West Switchgear Ltd and Kesharbai Electronics Ltd argued that the regulators had no use without electric fans and therefore they should be considered one product.

The Customs Excise & Gold (Control) Appellate Tribunal upheld the view of the revenue authorities that regulators were separate items inviting 15 per cent duty ad valorem, instead of 10 per cent.

The manufacturers can claim a lower duty only if the products are cleared along with the fans, but not cleared separately.

The Supreme Court approved of this judgment and pointed out that if the argument of the manufacturers were accepted, then one part or accessory in the industry could be classified separately and charged a higher duty.

The court set aside the penalty imposed on the manufacturers in the facts and circumstances of the case.

Andhra HC ruling set aside

The Supreme Court ruled last week that companies, which had been given "infancy protection," could avail of it despite an amendment to the Employees Provident Fund and Miscellaneous Provisions Act in 1998.

According to the infancy protection scheme, new units were given certain concessions in the matter of provident fund in the first three years.

But after the amendment, the authorities maintained that the benefits were not available any longer, as the amendment operated retrospectively.

This was challenged in writ petitions by certain mills in Andhra Pradesh. The high court there dismissed them, upholding the view of the authorities. The mills then appealed to the Supreme Court in the SL Srinivasa Jute Twine Mills vs Union of India case.

It ruled that the amendment did not specify that the law would work retrospectively. In such cases, it should be understood that the rule would operate only prospectively.

This is the principle followed by the courts in several judgments. Applying this interpretation, the Supreme Court set aside the high court ruling.

'Retired employees can't challenge VRS'

The Supreme Court last week set aside the ruling of the Bombay High Court and held that the two voluntary retirement schemes (VRS) declared by CEAT Ltd did not discriminate between the employees.

The company declared one scheme in 1992, which was accepted by 337 workers. In 1994, it declared another scheme, with an additional incentive of Rs 90,000.

The earlier batch moved the industrial court against the alleged "unfair labour practice" as defined in the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act.

The court asked the company to pay Rs 90,000 to the earlier batch also. When the company moved the high court, it asked the company to pay interest also on the difference.

The Supreme Court set aside all the orders and said the earlier batch could not move the industrial court as they were not workers after voluntary retirement. There was no partisanship or favouritism also, the judgment asserted.

Vidarbha Pharma director case

The Supreme Court on Friday dismissed an appeal against the judgment of the Bombay High Court that held that all former directors of Vidarbha Pharmaceuticals Pvt Ltd were jointly and severally liable under Section 543(1)(a) of the Companies Act to pay to the company Rs 6.29 lakh with 18 per cent interest from 1996.

The high court order was challenged by the legal representative of a former director of the company, which was wound up by an order of the high court. He moved review petitions in the high court, without result. The Supreme Court also dismissed his appeal.