Tribunal told to reconsider case

LEGAL DIGEST

The Supreme Court has asked the Central Excise and Gold Control Appellate Tribunal to reconsider the case of Commissioner of Central Excise vs Allied Air-Conditioning Corporation as the tribunal had not looked at the issues properly. The dispute was over the valuation of packaged type air-conditioner.

According to the authorities, the company was selling air-conditioners by assembling them at a site through orders procured from various places by way of tenders or contracts.

The contracts were divided into nine components. There was no dispute over compressors and accessories. But the authorities alleged that the company was clearing the goods without payment of duty on the excuse that the rest of the items like pumps, cooling towers and electrical material were assembled from a knocked-down condition.

They visited the site of the assembly and issued two show-cause notices. They later imposed duty and penalty. When the company took the matter to the tribunal, it allowed the petition without discussing the items separately, like accessories and components.

On appeal, the Supreme Court said that this was not proper and asked the tribunal to reconsider the stand of the revenue authorities as regards the disputed items and deal with them individually.

Coal briquettes not same as coal

The Supreme Court has dismissed the appeal of Sonebhadra Fuels against the judgement of the Allahabad High Court which had rejected the firm's contention that coal briquettes are the same commodity as coal, which had already been subjected to UP trade tax.

The firm argued that under the state Trade Tax Act, coal included coke in all its forms, excluding charcoal.

The definition of coal in the Central Sales Tax was also similar and tax could not be imposed on declared goods at more than one stage. The revenue authorities maintained that coal briquettes were made from coal dust by processing in which the coal dust lost its original form and quality and therefore, there was manufacture inviting tax.

Agreeing with the authorities, the court explained that "the expression manufacture covers within its sweep not only such activities which bring into existence a new commercial commodity different from the articles on which that activity was carried on, but also such activities which do not necessarily result in bringing into existence an article on which such activity was carried on."

For instance, ornamenting of goods does not result in manufacturing any goods which are commercially different but it still amount to manufacture under the trade tax law. The process in question in this case was manufacture, the court asserted.

Karnataka HC judgement set aside

The Supreme Court has set aside the judgement of the Karnataka High Court in the case of Steel Authority of India vs Union of India, in which more than 600 contract workers demanded absorption in the government company, Visveswaraya Iron and Steel Ltd, Bhadravati.

The high court had asked the government authorities to treat the demand raised by two employees' unions as an industrial dispute under the Industrial Disputes Act and also under the Contract Labour (Regulation and Abolition) Act.

Setting aside the judgement, the Supreme Court observed: "A definite stand was taken by the employees that they had been working under the contractors. It would, thus, in our opinion, not lie in their mouth to take a contradictory plea that they were also workmen of the principal employer. To raise such a mutually destructive plea is impermissible in law. Such a plea should not be allowed to be raised even in an industrial adjudication."

The case took more than two decades to reach a final solution.

Role of labour court limited

The Supreme Court has stated that the role of the labour court while examining the quantum of punishment awarded by the disciplinary committee was very limited. Unless there existed sufficient reasons, industrial courts should keep away from the question of punishment, the court said in the judgement, Anand Regional Coop Oil Union Ltd vs Shaileshkumar Shah.

In this case, an executive was dismissed from service for serious misconduct. He raised an industrial dispute and the labour court ordered the management to reinstate him with 25 per cent backwages. The high court upheld the labour court ruling.

On appeal, the Supreme Court stated that the labour court's ruling that stoppage of increment was enough for the misbehaviour was unwarranted. However, the Supreme Court noted certain peculiar facts in this case.

Six other employees who were charged with the same offence were allowed to take voluntary retirement. But no Shah. The Supreme Court said that he also should be given the benefit of voluntary retirement.

Agriculturist wins case

An agriculturist whose 11-acre land was auctioned by a cooperative bank to recover a loan of Rs 6,400 taken in 1971 has won his case in the Supreme Court two weeks ago. Kishori Lal was 15 years old, a minor in law, when he took the loan from the District Land Development Bank in Madhya Pradesh.

He could not return the loan and the bank sold the land without proper notice to him. The high court upheld the auction. However, the farmer appealed to the Supreme Court which held that he was a minor at the time of the mortage and therefore the contract was not valid.

Moreover, there was no proper notice at his residence as he had moved from the village address to Gwalior by the time the auction was declared. The Supreme Court allowed him to recover the land on payment of the auction amount plus 6 per cent interest.