Spice granted relief

LEGAL DIGEST

The Supreme Court has dismissed the appeal of the Commissioner of Customs, Bangalore, and granted Customs relief to Spice Telecom for import of radio terminals from Italter SPA, Italy.

The company cleared the goods under protest as the benefit under two notifications were not given to it. The Customs authorities in Delhi granted it the benefit for identical goods.

The company sought refund of Rs 35 lakh paid as duty. The claim was denied. The company moved the Customs, Excise & Service Tax Tribunal, whose order went in favour of the company.

Therefore the authorities appealed to the Supreme Court. The issue was whether the radio terminals imported should be considered as Base Transceivers Station (BTS) ancillary equipment in order to get exemption under the 1997 notification.

The authorities maintained that radio terminals are only interconnectivity apparatus between BTS and Main Switching Centre (MSC). The notification gives exemption only to BTS and not to parts. Radio terminals have an independent function, the authorities said.

The tribunal, after taking into consideration the technical literature held that radio terminals and antennae are ancillary equipment of BTS and there cannot be interconnectivity in the network system without radio terminals.

The tribunal granted the benefit of the exemption notification as had been given by the Delhi Customs House.

Excise on furniture

The Supreme Court has held that storage units, wall units, kitchen units and other items which cannot be moved without cannibalising them are not furniture for the purpose of central excise.

This was stated in a case, Craft Interiors Pvt Ltd versus Commissioner of Central Excise. The company undertakes civil works. The excise authorities issued it notices alleging that it manufactured and assembled furniture, which were excisable goods.

The company replied that their activities, like erecting storage units, kitchen counters and the like resulted in the emergence of immovable property and they could not be considered as furniture.

The company moved the Customs, Excise & Service Tax Appellate Tribunal, which dismissed its petition. It moved the Supreme Court, which held that the items manufactured by the company could not be called furniture as they were immovable.

Power arrears

The Supreme Court has asked the Punjab and Haryana High Court to consider the legal validity of a new condition introduced by the Haryana Electricity Distribution Corporation under the Electricity (Supply) Act.

According to the condition, if a consumer company defaults in paying energy charges, the buyer of the company has to clear the arrears before power is reconnected. In this case, LLC Steel Pvt Ltd had arrears of Rs 64 lakh.

The state financial corporation took over the firm and sold it to Paramount Polymers Pvt Ltd. The electricity company asked the new company to clear the arrears as it had bought the old one on "as is where is" basis.

The new company moved the high court, which delivered a judgment without considering the new clause. However, the company was given conditional supply of energy. Since the high court had not considered the validity of the condition, the Supreme Court remanded the case to the high court.

Meanwhile, the Supreme Court provided protection to the company for its energy needs on the condition that it paid a certain amount to the corporation.

Court keeps hands of dismissal

The Supreme Court has stated that when a bank has lost confidence in an officer and dismisses him from service, the court will not exercise its power of judicial review to examine the finding of the disciplinary authority.

In a case, Suresh Pathrella versus Oriental Bank of Commerce, the general manager of the bank's Gurgaon branch was dismissed for misappropriation of funds.

The police, however, closed the case as unfounded. The Supreme Court upheld the dismissal stating that the acquittal in a criminal case would be no bar for disciplinary proceedings against the officer.

Export benefits case sent to tribunal

The Supreme Court has set aside an order of the Customs, Excise & Service Tax Appellate Tribunal and remitted the case, Commissioner of Central Excise versus Suresh Jhunjhunwala to the tribunal for reconsideration in the light of the law laid down by the court.

Ganesh Yarntex Export Pvt Ltd filed six shipping bills under the Duty Entitlement Pass Book Scheme for claiming post-export benefits. Aadee Exports & Imports Ltd filed five such bills from the same address.

The authorities found that cheap garments were being exported by grossly misdeclaring the description and by heavy over-invoicing of the value. The goods were bought from Mumbai and sent to Hyderabad to be loaded on a vessel at Chennai.

They were confiscated. The firms moved the tribunal, which stated that the goods were not prohibited ones and so were not liable to be confiscated.

The Supreme Court held that this interpretation was wrong in view of its earlier rulings. The case was remitted to the tribunal for applying the correct principles.