The Supreme Court last week ruled that manufacturers of laminated particle board will be liable to pay a higher excise duty as after processing, the product becomes a distinct marketable commodity different from the original one. The panels, after lamination, become water resistant, scratch resistant and look attractive due to printed design paper. In this case, Commissioner of Central Excise vs Kitply Industries Ltd, the appellate tribunal had accepted the argument of the manufacturer that laminated board was similar to particle board. The court overruled that view.
Repacking gas attracts excise duty
Buying gas in bulk from market and repacking them in smaller cylinders after tests and giving different grades to it to be sold in open market would attract excise duty, the Supreme Court stated while dismissing the appeal of the manufacturer in the case, Air Liquide North India Ltd vs Commissioner. The company supplied helium gas to customers according to the specifications of its customers. It bought gas by its generic name and after tests and analysis sold them to different customers based on their specific requirements at a profit margin. The process was not revealed by the company as it claimed that it was its “trade secret”. The court held that the process of tests and categorization gave the gas different marketability and amounted to manufacture, attracting duty.
Employers flouting labour laws through subterfuges
Employers are resorting to subterfuges to defeat labour laws these days, the Supreme Court has lamented. In this case, Bhilwara Dugdh Utpadak Sahakari vs Vinod Kumar, the employer showed that the employees were those of his contractor. Criticising this practice which is adopted in the name of globalization and liberalization, the court remarked: “Labour statutes were meant to protect the employees because it was realised that the employers and the employees are not on an equal bargaining position. Hence, protection of employees was required so that they may not be exploited. However, this new technique of subterfuge has been adopted by some employers in recent years in order to deny the rights of the workmen under various labour statutes by showing that the concerned workmen are not their employees but are those of a contractor, or that they are merely daily wage or short-term or casual employees when in fact they are doing the work of regular employees.”
Ransom for executive deductible expense of company
A division bench of the Madhya Pradesh high court has ruled that ransom paid to a dacoit to release a kidnapped director of a company is “general expense” and is deductible in income tax assessment. In this case, CIT vs Tobacco Products Ltd, a director was kidnapped in Sagar who had gone there to buy tendu leaves. The police was unable to give help. So the company paid Rs 5.5 lakh to get him back. In the income tax returns, the company, manufacturer of bidis, showed this as general expense. It was rejected by the authorities. After travelling several ladder of tribunals, the question was referred to the high court. It ruled in favour of the company stating that it was allowable deduction under Section 37(1) of the Income-tax Act. The authorities argued that payment of any amount which is prohibited by law is not business expenditure. The high court rejected this contention and stated that the director was on business tour and was staying in government guest house from where he was kidnapped. No fault could be found in the claim of the company for deducting the ransom money.
Delhi HC injunction in trade mark violation by transporters
The Delhi High Court last week passed an injunction in a trade mark dispute between Drs Logistics Ltd and Dr Dilip Roadlines and restrained the latter from using the trade mark ‘Agarwal Packers and Movers’. The trade mark of Logistics was allegedly misused in several ways, leading to the application for injunction. The high court noted that Dilip Roadlines did not own the trade mark in question which stood registered in the name of Logistics. There was no dispute that Dilip Roadlines was using the disputed trade mark in advertisements and quotations. Since it is neither the proprietor nor the registered user of the trade mark, it has absolutely no right to use it and any such use would amount to infringement of the trade mark. Therefore, till the main suit is finally decided, the court passed the injunction order.
Compensation ordered for damaged cargo to UK
The National Consumer Commission last week dismissed the appeals of Zim Israel Navigation Co and Are Bee Star Maine Agencies Ltd against the order of the UT Chandigarh consumer commission which asked them to pay compensation for loss suffered by an exporter. Ramco International consigned a cargo of garden tools to England. The goods reached Sheffield in a mutilated condition. Therefore the consignee rejected the goods. Fresh package had to be sent to the buyer. This led to the consumer dispute. The national commission upheld the judgment of the union territory’s commission.
