The Hindu Business Line : Poles apart from reason

Is there a `manufacture' when pipes of different diameters are welded? That was the question before the apex court in the Hindustan Poles Corporation case. "Pipes/poles do not lose their original character and identity as pipes. The pipes retain their character as pipes, hence, no process of manufacture," said the company about its product `Stepped Transmission Poles', used by the telephone and electricity authorities.

But the Department insisted there was manufacture, and so the product ought to be classified under `structures'. One of the cases cited in the judgment dated March 27 is that of Indian Metals and Ferro Alloys (1991), where the facts were similar. "It may not be also correct to characterise them as a different commercial commodity," the court had observed then.

"Some of them are called poles, an expression which means `a long slender piece of metal or wood commonly tapering and more or less rounded'. Electric poles, being hollow ones, are not much different from pipes or tubes." Though called `poles', these are available "in the same market in which normally pipes and tubes are otherwise available."

On the problem of Hindustan Poles Corporation, the apex court said, "In view of the settled legal position, the activity of the appellants of merely joining of three pipes, one with other, of different dimensions to obtain a desired length can by no stretch of imagination be brought within the category of `manufacture'."

Justices AR. Lakshmanan and Dalveer Bhandari had this to tell the Department: "Before we part with this case we would like to impress upon the respondent authorities that before issuance of show-cause notices the Revenue must carefully take into consideration the settled law which has been crystallised by a series of judgments of this court."

And there was more: "The Revenue must make serious endeavour to ensure that all those who ought to pay excise duty must pay but in the process the Revenue must refrain from sending of indiscriminate show-cause notices without proper application of mind. This is absolutely imperative to curb unnecessary and avoidable litigation in courts leading to unnecessary harassment and waste of time of all concerns, including tribunals and courts."

William A. Ward offers this `pole' insight: "A well-developed sense of humour is the pole that adds balance to your steps as you walk the tightrope of life."

Interest-ink

On March 3, the Delhi High Court decided the Hewlett Packard India Ltd case. The company's writ petition prayed for a mandamus directing the Commissioner of Customs, Air Cargo, New Delhi, to implement the 2001 order of the Commissioner of Customs (Appeals), and also for refund of excess Customs duty of Rs 45,08,079, with interest, in respect of 28 excess Bills of Entry.

Dispute was about inkjet cartridges. HP said these are `parts of Automatic Data Processing Machines' and claimed concessional rate of duty at the rate of 5 per cent (under Sl. No. 230 of Notification No. 16/2000). But the Department demanded 25 per cent duty, citing another Sl. No. 233, with respect to inkjet cartridges. The verdict was in favour of HP.

D. Murali

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