Tractor trailer a separate category

LEGAL DIGEST

The Supreme Court has said tractor trailer is a separate and distinct category of "goods carriage" requiring permit under the Motor Vehicles Act.

Such vehicles can be taxed separately by state governments. In the Natwar Parikh Ltd vs State of Karnataka case, the company argued that its tractors and trailers were registered in Maharashtra as non-transport vehicles and transport vehicles, respectively.

They carried goods from Chennai via Andhra Pradesh to Karnataka. They were treated as distinct vehicles in Karnataka and were taxed by the state government. This was upheld by the Karnataka High Court and the Supreme Court. The company's appeal was dismissed.

Bigger Bench for cenvat credit case

The Supreme Court has referred one of its own judgments given last year, in the Commissioner of Central Excise vs JK Udaipur Udyog Ltd case, for reconsideration by a larger Bench.

The question involves the admissibility of credit of the duty paid on "inputs" and credit on "capital goods" under the cenvat rules.

The Udaipur Udyog judgment had stated that schemes for modvat and cenvat credits were different in the case of inputs. This has been questioned by M/s Vikram Cement and others in a new batch of appeals.

According to them, the cenvat scheme was identical to that of modvat for the interpretation of "inputs". This argument found favour with the court, which, therefore, requested the Chief Justice of India to constitute a larger bench for further deliberation on the matter.

Impression Prints told to pay excise

The Supreme Court has dismissed the appeal of M/s Impression Prints against the Commissioner of Central Excise and held that it is liable to pay excise on the textile articles produced by it and the notification of 1987 is not applicable to the process.

Under the notification, "made-up textile articles" are exempted from duty if made without the aid of power. The revenue authorities found that the company was not eligible for the exemption as it was mixing colour with the aid of power.

Therefore, a penalty was imposed on it. The company argued that mixing of colour was done only for the purpose of preparing the fabric and it could not be called a manufacturing process.

The Supreme Court rejected this argument saying the actual manufacturing of fabrics started with screen printing and colouring, and that these were integral parts of manufacturing.

No reason record to fire an employee

The Supreme Court has declared that a disciplinary authority in an establishment is not required to record its reasons for dismissal of an employee if it concurs with the enquiry officer's findings.

However, if it disagrees with the officer's conclusions, it must record its reasons to do so.

The Court said so in the judgment, National Fertilizers Ltd vs P K Khanna. The officer was dismissed for favouring a supplier, who had sent defective consignments.

He was dismissed after the enquiry officer's report. He challenged it in the Punjab and Haryana High Court, which passed its judgement in favour of him. The Supreme Court reversed the High Court finding.

Tribunal to look into land rent on mines

The question whether land rent on mines could be levied on a central government company by a state government was remitted to the appellate tribunal set up under the Bihar & Orissa Public Demands Recovery Act.

Central Coalfields Ltd challenged the Jharkhand High Court order making it liable to pay surface rent, despite its assertion that the land vested in the central government and that the state government had no right or interest in it.

However, the right of the state under the above law will be examined by the tribunal.