MRTPC issues notice to DaimlerChrysler
LEGAL DIGEST
| The notice was issued on a plea by Dinesh Kumar Mittal, director of Indore-based Amit Securities, alleging the company cheated and induced its customers to purchase its Mercedes S-Class model. He also sought a compensation of Rs 5 crore. |
| Mittal, who bought a Mercedes S-Class vehicle in March 2002, had said although the company claimed its cars were equipped with various safety features, its airbags and anti-lock braking system did not work during an accident, leading to death of a co-passenger. |
| The MRTPC has given the German auto major four weeks to reply after the company had sought additional time. |
| Earlier, on October 17, 2006, during proceedings in the MRTPC the company's Indian subsidiary DaimlerChrysler India Ltd had contended its parent company should not be impleaded. |
| However, the commission rejected it and said, "The main grievance of the complainant appears to be about misleading claims allegedly made by the manufacturers regarding the quality of the car and its various functions for which manufacturing company is answerable." |
| DaimlerChrysler earlier imported completely built units of S-class models and only last year started local assembly at its Pune unit. |
| The MRTPC had earlier said the presence of the parent company was necessary for effective adjudication of the dispute. |
| In the petition, Mittal said he was allegedly lured by misrepresentations made by the company and bought the car keeping security features in mind. |
| At the time of launch, the company claimed through public statements and brochures that Mercedes S-Class was the most safe car in the world and put on the road after a number of trials, Mittal had said. |
| Sebi plea against HC admitted |
| The Supreme Court on Wednesday admitted an appeal by the Securities and Exchange Board of India (Sebi) against Delhi High Court's order that asked the market regulator to refund a fee charged from brokers for obtaining multiple registrations for operating from several exchanges. |
| The appeal against the November 2005 order of the High Court was admitted by a division bench headed by Justice B P Singh and Justice H S Bedi, but no time-frame was set for the hearing. |
| The High Court had held that a stock broker was required to get only one certificate of registration and not multiple registrations from Sebi for operating from more than one stock exchange in the country and directed Sebi to refund any fee collected from a broker for subsequent registrations. |
| Sebi had through a circular dated March 16, 1998 made it mandatory for stock brokers to get multiple registrations from it for operating from several stock exchanges. Under the guidelines, brokers had to register with exchanges in addition to getting registered with Sebi. |
| If the appeal is turned down, the market regulator would have to cough up at least Rs 100 crore toward refunds to members. |
| Godfrey Phillips seeks stay on forum order |
| Cigarette major Godfrey Phillips has approached the Supreme Court seeking stay on a National Consumer Disputes Redressal Commission order that asked it to take corrective measures to neutralise the effect of a misleading advertisement. |
| The commission in February last year had directed the company to discontinue publishing advertisements which give an impression that the person who smokes its Red & White cigarette could perform stunts like actor Akshay Kumar in films and detracted people from the statutory warnings. |
| It had also asked the company to issue new advertisements of equal size in all English and Hindi newspapers giving the correct information to neutralise the effect of the misleading advertisement. |
| According to the cigarette manufacturer, the commission's direction was based on the provisions of Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003. This legislation was not applicable at the time of advertisement in 1999 and so such direction was in "total disregard of the applicable provisions of law", it said. |
| The order against the company was passed in February 2006 when the Act, which prohibited advertisements of cigarette, was already in force, the petition filed through advocate Rajan Narain said. |
| "As such, there was no cause for issuing any direction in that behalf," it said. |
| The company said the corrective advertisement cannot be issued now as it would make the manufacturer and seller of cigarettes as well as newspapers and magazines liable for breach of the Cigarette Advertisement Act. |
| While seeking setting aside of the direction, Godfrey Phillips said the purpose would not be served by any such corrective measures as no one would remember the advertisement issued in 1999. |
| It also said the compensation awarded to complainant Ajay Kumar was not justified as there was no prayer in this regard in his complaint. |
| The commission's directions had come on a complaint filed by Kumar seeking restraint on Godfrey Phillips from advertising its Red and White brand of cigarettes and holding any bravery contests. |
| SC favours tribunal's stand on garment firm |
| The Supreme Court has dismissed an appeal by the customs authorities for quashing an order of the Customs, Excise and Service Tax Appellate Tribunal (CESTET) that accepted the declarations made by a garment exporter. |
| The Commissioner of Customs (Export) had challenged the tribunal's order approving of the valuation made by garment exporter Frost International Ltd. |
| According to the appeal, the firm had filed 66 shipping bills for export of 9.24 lakh pieces of ready-made garments to Dubai under the drawback scheme during March 2004. It had claimed a drawback of more than Rs 3.31 crore on the declared FOB value of Rs 31.25 crore, the department said. It had argued that under the Customs Act, 1962 drawback duty cannot be allowed for goods whose market price is less than the amount of drawback. The court rejected this contention. |
| Hearing in BPO case on Feb 13 |
| The Supreme Court will hear the issue related to taxing of Business Processing Outsourcing (BPOs) units of multinationals in the country on February 13. |
| While hearing appeals of the income tax department and US investment banker Morgan Stanley, a bench, headed by Justice Arijit Pasayat, posted the matter for final hearing on February 13 when it will decide whether the appeals are admissible. |
| The income tax department and Morgan Stanley have filed appeals against the Authority for Advance Ruling (AAR). The authority had held that outsourcing activities carried by Morgan Stanley Advantage Services (MSAS), the Indian arm of Morgan Stanley, did not constitute a permanent establishment (PE) and the company was not liable to pay tax in India on a portion of its profit. |
| However, the parent company and the subsidiary had to ensure they did not violate fair pricing norms, the AAR said. |
| The issue, to be decided by the apex court, has wide-reaching implications on the tax liability of foreign companies, which outsource their back office functions to Indian companies. |