The sum equal to its parts

Written by Indu Bhan | Indu Bhan | Updated: Sep 19 2012, 09:27am hrs
A TV set disassembled is still a TV set

Upholding the Customs, Excise and Gold (Control) Appellate Tribunal order, the Supreme Court has held that Salora International Ltd, the manufacturer of various components of television sets, is liable to pay excise duty on the goods sent to its units in other parts of the country. The issue before the apex court was whether the goods manufactured and transported from the factory at Delhi are liable to be assessed as television receivers under Tariff Entry 8528 of the Central Excise Tariff Act, 1985, or as parts of television receivers falling under Tariff Entry 8529 for 1989-90.

The company manufactured, assembled for the testing purposes and then disassembled the components in its Delhi factory and then transported the goods as parts to its satellite units at different places, where the separate components were re-assembled in order to make them marketable.

Holding that the revenue had rightly classified the product as a complete television set even though it was subsequently disassembled, the apex court said that once the television receivers are assembled or are made completely finished goods, the manufacturing process is over and we are not concerned as to what happens subsequently. Whether they are sent to the satellite units of the appellant in its complete form or in a disassembled form is irrelevant.

According to the top court, the goods assembled at the satellite units would be identifiably the same as those assembled together by the company in its factory for the purpose of testing, as all such parts are already numbered and matched. This element of identifiability shall take the goods manufactured by the appellant (Salora) away from being classified as parts, and they will be classified as identifiable television receivers. The fact that the packing material for the products is also manufactured and transported by the appellant further lends credence to this conclusion, it added.

Senior counsel Dushyant Dave, on Saloras behalf, argued that if the goods are held to be television receivers then it would lead to double-taxation as the satellite units, where such goods are assembled into television receivers, are paying excise duty on the assembled goods under the Tariff Entry 8528.

Labour issue for larger bench

The Supreme Court has referred the case of Ram Shiroman Mishra vs Vishwanath Pandey to a larger bench to decide whether the labour court or the industrial tribunal loses its power to recall an ex parte order after 30 days of the pronouncement/publication of the award.

The two benches of the apex court had given different interpretations on the issue. While a division bench has, in the case of Sangam Tape Co, observed that an application for recall of an ex parte award may be entertained by the industrial tribunal/labour court only in case it is filed before the expiry of 30 days from the date of pronouncement/publication of an award, a contrary view was taken by another bench in the case of Radhakrishna Mani Tripathi vs LH Patel.

In this case, the secretary (labour) had referred the dispute to a labour court, which had termed Pandeys retrenchment as illegal and ordered reinstatement with continuity in service and full back-wages. The labour court had also rejected the employers application seeking recall of its ex parte order on the grounds that the application was filed after publication of the award and after issuance of the recovery certificate, thus it did not have any jurisdiction to entertain the application for setting aside the award. Even the Delhi High Court dismissed Mishras appeal observing that no explanation was given by the employer as to why no steps were taken to challenge the award expeditiously.

Only judges as heads of information panels

Ruling that only serving and retired judges of the apex court and chief justices of state high courts can head the central and state information commissions, respectively, the Supreme Court has directed the Centre to amend the Right to Information Act, 2005, and frame the new practice and procedure related rules within six months. It said the functions of the chief information commissioner and information commissioners can be better performed by a legally qualified and trained mind possessing the requisite experience as information commissions are judicial tribunals and need to be manned by a person of judicial mind, expertise and experience in that field.

The RTI Act states that the chief information commissioner and information commissioners must be persons of eminence in public life with wide knowledge and experience in law, science and technology, social service, management, journalism, mass media or administration and governance.

The information commissions at the respective levels shall henceforth work in benches of two members eachone of them being a judicial member, while the other an expert member. The judicial member should be a person possessing a degree in law, having a judicially trained mind and experience in performing judicial functions, ruled the apex court. It said that lawyers with work experience of over 20 years will also be eligible for appointment as a member and all such decisions will be taken after consultations with the chief justice of India and the chief justices of the respective high courts.

However, the RTI activists have termed the decision as a classic example of judicial overreach aimed at a complete overhaul of the system.

indu.bhan@expressindia.com