UP Power Corp wins appeal

LEGAL DIGEST

UP Power Corporation Ltd won its appeal in the Supreme Court last week regarding penalty for violating peak hour restrictions by industrial units.

The question was whether one meter reading inspection report should be considered as a single violation irrespective of the fact that a number of contraventions might have been made by the consumers during the period covered by the report.

The problem arose after the introduction of the computerised electronic meters. It can download the consumption for 35 days. The company in this case, Bonds & Beyonds (India) Ltd, argued that the number of violations could be counted as only one per report, though there might be more violations during the period covered by the report.

The Allahabad High Court agreed with it. On appeal by the corporation, the Supreme Court stated that there could be penalty for each contravention recorded by the meter in one report.

AC parts not to be evaluated for excise

The Supreme Court has ruled that parts and accessories of air conditioners could not be classified along with compressors for excise purposes. The court thus rejected the appeal of the Commissioner of Central Excise against the judgment of the excise tribunal in the case of Frick India Ltd. The company manufactures air conditioning and refrigeration machinery. It cleared to its buyers compressors under the heading 8414.10.

It also cleared separately parts like fly wheel, safety valve and filter under different headings. The revenue authorities issued show-cause notice to the company alleging that there was evasion of duty on the full value of the compressors by invoicing the bought out items and manufactured items separately.

It was also alleged that the compressors were undervalued while the accessories were over-valued. The Supreme Court held that this view was wrong. However, the court accepted the argument of the authorities that the valuation should be done once again with the help of costing and auditing figures.

UP mills not bound to supply molasses

The apex court has ruled that sugar mills in Uttar Pradesh are not bound to supply 20 per cent molasses for making country liquor unless they have excess of the product.

The state government had issued show-cause notice to Dhampur Sugar Mills Ltd for not supplying molasses according to the Molasses Control Rules. This was held illegal. The court also directed the state to constitute a committee to look into the issue of storage, supply and disposal of molasses, while allowing the appeal of the sugar mills.

Dhampur Sugar appeal dismissed

The Supreme Court has dismissed the appeal of Dhampur Sugar (Kashipur) Ltd against the judgment of the Uttaranchal High Court upholding the grant of licence to Indian Glycols Ltd (IGL) for power driven crushers for the manufacture of "rab" from sugarcane.

Earlier, the sugar commissioner had rejected the application of IGL according to the licensing policy, under which new licences to khandsari units could not be granted in the reserved areas of existing sugar mills. The IGL application operated in the reserved area of Dhampur Sugar. However, the state government later modified the policy and the government was empowered to relax the limitation laid down earlier. This was challenged by Dhampur Sugar. The court dismissed its petition declaring that the state government had the power "to frame, reframe, change and rechange, adjust and readjust its policy."

Signal decoders to invite higher duty

The Supreme Court last week ruled that the signal decoder normally used by cable operators for distributing satellite signals, collected by dish antenna, would be classified under Entry 8528 of the Customs Act entailing higher duty. The court thus allowed the appeal of the Commissioner of Customs, Delhi, against an order of the Customs tribunal which had held that the decoder should be classified under Entry 8529. The court set aside that ruling, citing a few recent Canadian judgments which had dealt with the same issue.