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| Judgments prevail over excise department circulars: SC |
| BS Reporter / New Delhi Apr 20, 2009, 00:40 IST |
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The Supreme Court last week emphasised that circulars and instructions issued by the customs and excise boards are no doubt binding on the authorities but when the Supreme Court or a high court declares the law on a disputed question, the courts’ view shall prevail.
The court reiterated the view last week in the case, Commissioner of Central Excise vs Hindoostan Spinning & Weaving Mills Ltd. The authorities had sought clarifications in some earlier judgments. Therefore, the Supreme Court once again asserted that the circulars represented only the understanding of the law by the officials. But they are not binding on the courts.
Baidyanath plea on toothpaste rejected
The SC last week dismissed the appeal of Baidyanath Ayurvedic Bhawan Ltd, maker of ‘Dant Manjan Lal’, rejecting its contention the product was a medicament according to the Central Excise Tariff Act, and not a cosmetic/toiletry preparation/tooth powder.
The classification of the product had created some difference of opinion in the excise tribunals. Baidyanath resisted show cause notices on diverse grounds; that the product is an Ayurvedic Medicine, that it manufactures it under a drug licence, that its ingredients are mentioned in the authoritative book of Ayurved System of Medicine, and that the product is an Ayurvedic medicine in the trade and common parlance. Baidyanath, thus, claimed it was eligible for the benefit in excise. The SC stated that what is important to be seen is how the consumer looks at a product.
Higher damages than in the schedule can be awarded
The SC ruled last week in the case, Rani Gupta vs United India Insurance Co Ltd, that motor accident claims tribunals can award compensation which are higher than those prescribed in the second schedule to the Motor Vehicles Act. Parliament had thought Rs 50,000 should be the minimum compensation payable to legal representatives of persons whose annual income is Rs 3,000 per month.
In the present case, the businessman earning Rs 2 lakh a year was awarded Rs 17.4 lakh by the tribunal, which was reduced by the Delhi high court to Rs 12.5 lakh. The SC stated in view of the age of the businessman (46) he would have earned for ten more years and therefore the compensation was fair. SC not bound to hear international arbitration appeals bypassing HCs: The Supreme Court has dismissed the appeal of Shin-Etsu Chemical Co Ltd in its dispute with Vindhya Telelinks Ltd and stated that the foreign company could move the Madhya Pradesh high court for international arbitration.
The district judge in Rewa had rejected the foreign company’s plea for referring the dispute to arbitration under Section 45 of the Arbitration and Conciliation Act. The company directly approached the Supreme Court in appeal. The Indian company opposed the appeal, arguing that the foreign company could not approach the Supreme Court, bypassing the high court.
This argument was accepted by the Supreme Court. It emphasised that no one had a right to appeal to the apex court, and the latter will grant special leave to hear appeals only if the parties had exhausted all other remedies available to them. Power tariff dispute remitted to tribunal: In the dispute between DLF Power Ltd and Central Coalfields, the Supreme Court has asked the parties to approach the appellate tribunal for electricity in New Delhi again to determine the tariff. In 2007 the court had directed M/s Ernst & Young to determine the actual capital cost for Rajrappa and Giddi plants based on the formula in the power purchase agreement between CCL and DLF.
It had also directed that the copy of the report of the cost accounts be given to the parties and to the Jharkhand State Electricity Regulatory Commission. CCL’s complaint is that the report was made only on the basis of the documents submitted by DLF. Accepting this complaint, the court stated that as the process of evaluation involved in fixing the tariff is complex, the tribunal shall hear CCL view on tariff if it raises the issue before it. Cheque bounce punishment diluted : The Supreme Court has ruled that a person cannot be sentenced for each dishonoured cheque he had sent in the same transaction. In this case, State of Punjab vs Madan Lal, three cheques were issued by the accused person which were dishonoured.
The sessions court convicted him under Section 138 of the Negotiable Instruments Act and sentenced him to jail. The sentence for all the cheques was to run concurrently, not consecutively. The Punjab and Haryana high court upheld the sentence. But the state government appealed to the Supreme Court arguing that the accused should suffer sentence for each cheque one after the other, and not together, as ordered by the courts below. The Supreme Court dismissed the government’s appeal.
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