Pumps and parts exempt from duty

LEGAL DIGEST

Both power driven pumps as well as their parts used within the factory are exempted from excise duty, the Supreme Court has clarified in WPIL Ltd vs Commissioner.

Though this was the accepted position for a long time, the government rescinded 389 notifications in 1994 and reissued a consolidated notification incorporating all earlier notifications to reduce their bulk. Parts of power driven pumps were omitted.

The authorities issued demand notices to the manufacturers. But the Supreme Court has now clarified that the parts would continue to be exempted from duty.

Sunder Steels gets relief

The Supreme Court has dismissed the appeal of the excise authorities against Sunder Steels Ltd stating that merely because 96 per cent of the production of ingots manufactured in the steel plant was out of sponge iron bought from outside sources, it could not be denied duty benefits declared in the notification dated August 1, 1997.

The authorities insisted that as the majority of the production was from sponge iron bought from outside, the unit could not claim the benefit. Rejecting this view, the court said that once it was shown that it was an integrated steel plant producing ingots starting from the stage of iron ore within the same premises, the unit would be entitled to the benefit.

Polyester chips are not waste

Polyester chips emerging from the manufacture of yarn while "bagging" granules were not wastes, but should be classified as primary form of plastic, the Supreme Court has held in DCL Polyester Ltd vs Collector. The company claimed that it was "sweeping wastes", not liable to duty.

The authorities maintained that they were a form of plastics and raised demand. The court pointed out that the invoices of the company themselves showed that the chips were sold and bought as polyester chips in the market

Workers union loses two-decade case

The Supreme Court has dismissed the appeal of Kapra Mazdoor Ekta Union against Birla Cotton Spinning & Weaving Mills in a dispute pending in various courts for over two decades. Winding its way up, the dispute reached the Delhi high court in 2001 which decided in favour of the management. The Supreme Court has now dismissed the appeal of the union.

Resignation not liable to acceptance

The Supreme Court has set aside the ruling of the Madras high court in the arbitration appeal of the railways against its contractor, Tecco Trichy Engineers & Contractors.

The dispute was over the service of the arbitral award on the General Manager, while the person who dealt with the contract was the Chief Engineer of the railway. This caused delay in filing the Chief Engineer's application to quash the award.

The high court did not condone the delay of four days. The Supreme Court reversed this finding and stated that such a delay was understandable and natural in large government department.