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1984 (11) TMI 358
Issues Involved:
1. Requirement of prior permission under Section 29(1)(b) of the Foreign Exchange Regulation Act (FERA) for purchasing shares by Non-Resident Indian (NRI) investors.
2. Validity and retrospective effect of the press release, circular, and letter issued by the Reserve Bank of India (RBI).
3. Legality and propriety of the requisition notice issued by the Life Insurance Corporation (LIC) for an Extraordinary General Meeting (EGM) to remove directors.
4. Allegations of mala fides and arbitrariness against the LIC and other financial institutions.
5. Jurisdiction and propriety of granting declaratory relief under Article 226 of the Constitution.
6. Costs and consequences of the writ petition.
Detailed Analysis:
1. Requirement of Prior Permission under Section 29(1)(b) of FERA:
- The court held that Section 29(1)(b) of FERA is mandatory and no NRI investor may purchase shares in an Indian company under the portfolio investment scheme without obtaining prior permission of the RBI. Any purchases made without such prior permission would expose the investor to action under Sections 50 and 57 and prosecution under Section 56 of FERA. Such purchases would be illegal. The shares in question were all purchased by the respondent-companies prior to September 19, 1983, before any permission was granted. These purchases contravene Section 29 of FERA and Regulation 24.1 issued by the RBI as also the conditions stipulated by Circular No. 9 dated April 14, 1982.
2. Validity and Retrospective Effect of the Press Release, Circular, and Letter Issued by RBI:
- The press release dated September 17, 1983, the Circular dated September 19, 1983, and the letter dated September 19, 1983, cannot operate retrospectively so as to validate the purchase of shares made by NRI companies which were ineligible on the date of purchase. The clarifications under Exhs."A", "B" and "C" would amount to amending the portfolio investment scheme with full repatriation benefits introduced under Exh."G" prospectively, that is, on and from September 19, 1983, which is the date of its issue and they are valid from that date and validly operate prospectively. They, however, cannot operate retrospectively so as to validate the purchase of shares made by legal entities which were ineligible on the date of purchase or authorize the purchase of shares without obtaining prior permission of the RBI under Section 29(1)(b) of FERA.
3. Legality and Propriety of the Requisition Notice Issued by LIC for an EGM to Remove Directors:
- The requisition notice issued by the LIC for an EGM to remove nine out of fifteen directors of the petitioner-company and replace them with nine whole-time employees of public financial institutions was found to be arbitrary and not in conformity with Section 284 of the Companies Act. The court held that the requisition notice does not conform to the provisions of Section 284 of the Companies Act, inasmuch as it does not disclose any reasons or grounds for moving a resolution to remove the directors. The notice offends the principle of natural justice. The action of the LIC in issuing the impugned requisition notice is an arbitrary and mala fide exercise of power for a collateral purpose; it is violative of Article 14 of the Constitution.
4. Allegations of Mala Fides and Arbitrariness Against LIC and Other Financial Institutions:
- The court found that the LIC and other financial institutions linked up the proposals of the petitioner-company to accept prepayment of loans and to agree to the merger of Goetze-Escorts Ltd. with the issue of registration of transfer of shares in favor of the Caparo group of companies. This linking up amounted to exercising illegal and unauthorized pressure on the petitioner-company and its management and constituted commercial duress and abuse of their dominant position. The court, however, found that the allegations of mala fides against respondents Nos. 1 and 2 (Union of India and RBI) were unsubstantiated.
5. Jurisdiction and Propriety of Granting Declaratory Relief under Article 226 of the Constitution:
- The court held that it is empowered and justified in granting a declaratory relief simpliciter under Article 226 of the Constitution. In certain circumstances, the declaratory relief itself may constitute substantive relief and having regard to the declaration granted, the respondents may also be restrained from taking any action contrary to the said declaration. The court granted declaratory relief and issued a writ of mandamus restraining the respondents from implementing the impugned circular and letter with respect to the shares purchased by the respondent-companies.
6. Costs and Consequences of the Writ Petition:
- The court directed that the costs of the writ petition should come out of the funds of the petitioner-company irrespective of the ultimate result of the writ petition or any appeal that may be filed against this judgment. The petitioners were entitled to costs, which were fixed at Rs. 25,000 from respondents Nos. 1, 2, and 3. The court also held that the subsequent events, such as the resolutions adopted at the EGM, must stand nullified if the requisition which is the foundation for this meeting itself is declared illegal.
Conclusion:
The court allowed the writ petition and made the rule absolute, granting declaratory relief and issuing a writ of mandamus restraining the respondents from implementing the impugned circular and letter and from taking any steps or action in pursuance of the impugned requisition notice and/or the resolutions passed at the EGM held pursuant to the said notice. The costs of the writ petition were directed to be borne by the petitioner-company.
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1984 (11) TMI 357
Issues:
1. Whether the Court has the jurisdiction to direct further investigation after taking cognizance of a case.
2. Whether the investigating officer can conduct further investigation even after the Court has taken cognizance of the matter.
3. Interpretation of Section 173(8) of the Criminal Procedure Code regarding further investigation post taking cognizance.
Analysis:
1. The petitioner, an Accountant, faced allegations of misappropriation under Section 408 of the Indian Penal Code. The Chief Judicial Magistrate ordered further investigation upon an application by the prosecution, despite the petitioner's objection. The petitioner contended that once cognizance is taken, the Court lacks jurisdiction to direct further investigation.
2. The Court clarified that Section 173(8) allows for additional investigation even after cognizance is taken. Referring to past judgments, the Court emphasized the importance of allowing further investigation to uncover new evidence, ensuring fairness to both prosecution and defense.
3. Citing the case of State of Bihar v. J.A.C. Saldanna, the Court highlighted that the power to direct investigation post-cognizance is distinct from the method of investigation. The Court also addressed the misconception highlighted in Tula Ram v. Kishore Singh, emphasizing that Section 173(8) empowers the Court to order further investigation as necessary.
4. Relying on previous decisions, the Court affirmed the Magistrate's authority to direct further investigation under Section 173(8) even after taking cognizance. The Court rejected the petitioner's argument that the investigating officer becomes functus officio after submitting a charge-sheet, emphasizing the importance of ongoing investigation to serve justice.
In conclusion, the Court upheld the Magistrate's decision to order further investigation, emphasizing the necessity and legality of such actions under Section 173(8) of the Criminal Procedure Code. The revision application was rejected, and the rule was discharged.
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1984 (11) TMI 356
Issues:
1. Liability of partners of a firm for prosecution in addition to the firm for non-compliance with license terms.
2. Impleading partners in a criminal prosecution against the firm.
3. Power of the High Court under Section 482 of the Criminal Procedure Code to quash proceedings against partners in a criminal prosecution.
Analysis:
Issue 1:
The judgment addresses the liability of partners of a firm for prosecution in addition to the firm for non-compliance with license terms. The court emphasizes that the licensed person, in this case, the firm, is personally liable for any violations. The liability cannot be extended to partners solely based on their position in the company. Specific averments must be made in the complaint against each partner to hold them individually responsible for the offense committed under the rule.
Issue 2:
Regarding the impleading of partners in a criminal prosecution against the firm, the court notes that the complaint lacked specific allegations against the partners individually. It highlights that partners cannot be held liable merely based on the assumption of their position in the firm. The complaint must establish that each partner is personally guilty of the act that constitutes an offense under the rule.
Issue 3:
The judgment delves into the power of the High Court under Section 482 of the Criminal Procedure Code to quash proceedings against partners in a criminal prosecution. It cites precedents where the Supreme Court outlined conditions under which criminal proceedings could be quashed. The court emphasizes that if, based on the complaint and accompanying documents, no offense is established against the accused, the High Court may quash the proceedings. In the present case, the court finds that the complaint does not make out a prima facie case against the partners, leading to the quashing of the proceedings against them.
In conclusion, the judgment clarifies the personal liability of partners for firm violations, the necessity of specific allegations against partners in a complaint, and the circumstances under which the High Court can exercise its power to quash criminal proceedings.
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1984 (11) TMI 355
Issues Involved:
1. Allegations of corrupt practice under Section 123(3) of the Representation of the People Act, 1951.
2. Examination of evidence regarding the issuance of Hukamnama.
3. Analysis of speeches and publications appealing to religious sentiments.
4. Verification of the election petition.
Detailed Analysis:
1. Allegations of Corrupt Practice:
The appellant challenged the election of Respondent No. 3 to the Punjab Legislative Assembly on the grounds of corrupt practice under Section 123(3) of the Representation of the People Act, 1951. The appellant alleged that Respondent No. 3 and his agents appealed to voters on religious grounds, specifically invoking Sikh religion, which is considered a corrupt practice under the Act.
2. Examination of Evidence Regarding the Issuance of Hukamnama:
The appellant alleged that Hukamnamas were issued by Akal Takht, urging voters to support Respondent No. 3. The High Court initially dismissed these allegations, doubting the veracity of the evidence and emphasizing that the appellant failed to prove the charges beyond reasonable doubt. The Supreme Court, however, considered the historical and religious significance of Hukamnamas and the unique position of Akal Takht among Sikhs. The Court concluded that even if the documents were not technically Hukamnamas, they were represented as such, influencing the electorate.
3. Analysis of Speeches and Publications Appealing to Religious Sentiments:
The appellant provided evidence of speeches and publications, including articles in Akal Times, which propagated that voting against Respondent No. 3 would be against Sikh religion. Witnesses testified that speeches made by prominent figures like Shri Parkash Singh Badal and Sant Harchand Singh Longowal at election meetings emphasized the religious duty of Sikhs to vote for Respondent No. 3. The Supreme Court found this evidence credible, especially in the absence of rebuttal from key figures like Shri Parkash Singh Badal.
4. Verification of the Election Petition:
A point was raised about the improper verification of the petition, arguing that the source of information was not mentioned. The Supreme Court referred to Section 83 of the Representation of the People Act, 1951, and previous case law, concluding that while the source should ideally be indicated, the objection was not raised at the initial stage. Therefore, the Court did not find it necessary to dismiss the petition on this ground.
Conclusion:
The Supreme Court found Respondent No. 3 guilty of corrupt practice under Section 123(3) of the Representation of the People Act, 1951, as the evidence demonstrated an appeal to religious sentiments. Consequently, the election of Respondent No. 3 was set aside, and the seat was declared vacant. The findings were forwarded to the President of India for appropriate action under Section 8A of the Act. The appeal was allowed, and Respondent No. 3 was ordered to pay the costs of the appeal.
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1984 (11) TMI 354
Issues Involved:
1. Bona fide requirement of the landlord.
2. Suppression of material evidence by the landlord.
3. Concurrent findings of lower courts.
4. Consideration of subsequent events in appellate proceedings.
Issue-wise Detailed Analysis:
1. Bona fide requirement of the landlord:
The respondent-landlord claimed that the premises were required for starting a retail business due to the inconvenience and uneconomical nature of his current wholesale business. The trial court, appellate authority, and the High Court all concurred that the landlord's requirement was bona fide. However, the Supreme Court noted that the lower courts confused 'requirement' with 'desire' and failed to differentiate between the two. The appellate authority wrongly justified the landlord's need based solely on the fact that he was running his business in tenanted premises, which was not the respondent's original contention.
2. Suppression of material evidence by the landlord:
The appellant challenged the landlord's claim of incurring losses in his wholesale business and called for the production of financial documents. The landlord failed to produce these documents, citing that they were with his auditor who was out of station. The trial court accepted the landlord's assertion without adverse inference for non-production of evidence. The Supreme Court criticized this approach, highlighting that evidence showing business losses was not only unproduced but suppressed, thus questioning the genuineness of the landlord's claim.
3. Concurrent findings of lower courts:
The Supreme Court acknowledged that three courts had concurrently held the landlord's requirement as bona fide. However, it emphasized that the burden lies on the appellant to show that these decisions were manifestly unjust. The Supreme Court found that the lower courts had drawn a priori conclusions without proper evidence, thereby denying justice to the appellant. The High Court's summary dismissal of the revision petition was also criticized for not addressing the core issue.
4. Consideration of subsequent events in appellate proceedings:
The Supreme Court highlighted the necessity of considering subsequent events during appellate proceedings. By the time the civil revision petition was argued before the High Court, the landlord had already obtained eviction orders against three out of four ground floor tenants and one out of three first-floor tenants. The Supreme Court referenced the decision in *Hasmat Rai v. Raghunath Prasad*, emphasizing that the landlord's need must exist at the date of the appellate decree or when a higher court deals with the matter. The High Court failed to consider these subsequent events, which significantly altered the factual position and potentially negated the landlord's requirement for the appellant's premises.
Conclusion:
The Supreme Court found no justification for evicting the appellant given that the landlord's requirement was adequately met by the eviction of other tenants. It doubted whether the landlord would have succeeded in any of the cases if the trial court had correctly appreciated the suppression of material evidence. Consequently, the judgments of the High Court, the Appellate Authority, and the trial court were set aside, and the eviction petition against the appellant was dismissed. The respondent was ordered to pay costs quantified at rupees five thousand.
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1984 (11) TMI 353
Issues Involved:
1. Legislative competence of the Union Parliament regarding Section 34(1)(c) of the Estate Duty Act.
2. Violation of Article 19(1)(f) of the Constitution by Section 34(1)(c) of the Estate Duty Act.
3. Violation of Article 14 of the Constitution by Section 34(1)(c) of the Estate Duty Act.
Issue-Wise Detailed Analysis:
1. Legislative Competence of the Union Parliament:
The petitioners initially challenged Section 34(1)(c) of the Estate Duty Act on the grounds that it was beyond the legislative competence of the Union Parliament. However, this argument was not pursued by the petitioners' counsel, and the court found no merit in this contention. The judgment states, "We are of the opinion that the contention of the petitioners that section 34(1)(c) was beyond the legislative competence of the Union Parliament, which was not rightly pursued, has absolutely no merit and we have no hesitation in rejecting the same."
2. Violation of Article 19(1)(f) of the Constitution:
The petitioners also challenged Section 34(1)(c) based on Article 19(1)(f) of the Constitution. However, this article was deleted from the Constitution by the 44th Amendment Act, 1978. The court noted, "With the deletion of article 19(1)(f) of the Constitution from June 20, 1979, by the 44th Amendment of the Constitution, the challenge based on that provision is no longer available. Even otherwise, article 19(1)(f) did not guarantee any immunity from taxation." Therefore, this challenge was dismissed.
3. Violation of Article 14 of the Constitution:
The primary issue remaining was whether Section 34(1)(c) violated Article 14 of the Constitution, which forbids class legislation but allows reasonable classification for legislative purposes. The petitioners argued that the provision discriminated against undivided coparceners in a Mitakshara joint family by subjecting them to higher estate duty compared to those who had divided prior to their death. They contended, "There is no reasonable nexus between the object of the statute and the levy of the duty on the principle of aggregation."
The court examined this contention in detail. It referred to the Supreme Court's principles on Article 14 and reasonable classification, noting, "In order to pass the test of permissible classification, two conditions must be fulfilled, namely, (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group, and (ii) that that differentia must have a rational relation to the object sought to be achieved by the statute in question."
The court also reviewed the history and objectives of the Estate Duty Act and its amendments. It noted that the aggregation for rate purposes was a common feature in taxation laws and was justified by the peculiarities of the Hindu undivided family system under Mitakshara law. The court stated, "Aggregation for rate purposes and consequent provision for a higher levy is nothing new or novel and is a familiar tool of the taxman."
The court disagreed with the Madras High Court's decision in Devaki Ammal's case, which had struck down Section 34(1)(c) as unconstitutional. Instead, it followed the reasoning of other High Courts and the Supreme Court, which had upheld similar provisions. The court concluded, "On an independent examination itself, we are of the view that section 34(1)(c) is not violative of article 14 of the Constitution."
Conclusion:
The court dismissed the writ petitions, upholding the validity of Section 34(1)(c) of the Estate Duty Act. It found no merit in the challenges based on legislative competence and Article 19(1)(f) of the Constitution. The challenge based on Article 14 was also rejected, with the court concluding that the provision did not violate the principle of equality. The court granted a certificate of fitness to appeal to the Supreme Court, recognizing the substantial question of law and the difference of opinion among various High Courts. The judgment states, "We accordingly grant a certificate of fitness to appeal to the Hon'ble Supreme Court under articles 133(1) and 134A of the Constitution to the petitioners and direct the Registrar to issue them the necessary certificate with expedition."
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1984 (11) TMI 352
Issues Involved:
1. Passing off action
2. Deceptive similarity of trade marks
3. Misappropriation of business goodwill
4. Unfair competition
5. Balance of convenience in granting injunction
6. Delay and acquiescence
7. Geographic scope of goodwill
Issue-wise Detailed Analysis:
1. Passing off action:
The plaintiffs, B.K. Engineering Co., filed a passing-off action against the defendants, Ubhi Enterprises, claiming that the defendants' use of the mark "B.K.-81" was deceptively similar to their house mark "B.K." and likely to cause confusion and deception in the market. The court reiterated the principle that "no body has any right to represent his goods as the goods of somebody else" and emphasized that passing off protects a trader's property in his business or goodwill from misrepresentation that could damage it (Erven Warnik v. Townend and Sons).
2. Deceptive similarity of trade marks:
The plaintiffs argued that their house mark "B.K." had become associated with their goods and that the defendants' use of "B.K.-81" was likely to mislead the buying public into believing that the defendants' products were associated with the plaintiffs. The court noted that even the addition of "81" to "B.K." was insufficient to differentiate the defendants' products and could still lead to confusion and deception among consumers.
3. Misappropriation of business goodwill:
The court found that the plaintiffs had established a prima facie case of injury to their business goodwill. It emphasized that goodwill is "the attractive force which brings in custom" and that misappropriation of a name or mark that has become distinctive of a trader's goods can lead to injury to that trader's goodwill. The court cited several cases to illustrate that unauthorized use of a commercial name can lead to an injunction to protect the plaintiff's goodwill.
4. Unfair competition:
The court discussed the concept of unfair competition, noting that it involves acquiring the benefit of a rival trader's reputation through false and misleading devices. The court found that the defendants' use of "B.K.-81" constituted unfair competition as it misappropriated the plaintiffs' business reputation and created an injurious association with the plaintiffs' goods.
5. Balance of convenience in granting injunction:
The court considered the balance of convenience, noting that the plaintiffs had been in business since 1971 while the defendants started in 1981. It found that the balance tilted in favor of the plaintiffs, as the defendants were recent entrants and could be compensated in damages if necessary. The court emphasized that the misrepresentation complained of was likely to cause confusion and that the plaintiffs were entitled to a temporary injunction to protect their goodwill.
6. Delay and acquiescence:
The defendants argued that the plaintiffs were guilty of delay and acquiescence, but the court rejected this argument. It found that the plaintiffs had sued as soon as they became aware of the defendants' activities and that there was no evidence to suggest that the plaintiffs had knowingly encouraged the defendants to proceed with their use of "B.K.-81."
7. Geographic scope of goodwill:
The defendants contended that there was no likelihood of confusion as the plaintiffs operated in Delhi and the defendants in Ludhiana. The court dismissed this argument, stating that "goodwill does not necessarily stop at a frontier" and that the plaintiffs' reputation could extend beyond their immediate geographic location.
Conclusion:
The court allowed the appeal and issued an injunction restraining the defendants from manufacturing, selling, or dealing in cycle bells under the mark "B.K.-81" or any mark deceptively similar to the plaintiffs' house mark "B.K." until the decision of the suit. The court emphasized that trading must be honest and not even unintentionally unfair, and that the plaintiffs had a prima facie right to relief based on the misappropriation of their goodwill and business reputation.
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1984 (11) TMI 351
The Delhi High Court ruled in favor of the petitioner, a registered dealer under the Delhi Sales Tax Act, who purchased goods from the Director General of Supplies and Disposals. The petitioner was not required to pay sales tax as they provided the ST-I form, exempting them from tax. The Court directed that the sale to the petitioner should be without charging sales tax, as per the law.
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1984 (11) TMI 350
Issues Involved:
1. Investment allowances under section 32A.
2. Relief under section 80J.
3. Requirement of Form No. 10D for section 80J relief.
4. Entitlement to extra shift allowance on transformers.
Detailed Analysis:
1. Investment Allowances under Section 32A:
The primary issue was whether the activities of the assessee, involving bleaching, dyeing, calendering, and printing of textiles, constituted "manufacture" under section 32A(2)(b)(iii) of the Income-tax Act, 1961. The department argued that these activities were merely processing and did not result in a new article or thing. They referenced several cases, including Union of India v. Delhi Cloth & General Mills Co. Ltd. AIR 1963 SC 791, to support their claim that no new article was produced, thus disqualifying the assessee from investment allowances.
The assessee countered by citing the Bombay High Court's decision in New Shakti Dye Works (P.) Ltd. v. UOI 1983 ECR 1143D, which held that processes like bleaching, dyeing, and printing transformed grey cloth into a distinctively new article known in the market. The Tribunal agreed with the assessee, emphasizing that the processes resulted in a new product with a different name, character, and use, thus qualifying as "manufacture."
2. Relief under Section 80J:
The second issue was whether the assessee was entitled to relief under section 80J, which also hinged on whether their activities constituted "manufacture." The Tribunal, consistent with its findings on the investment allowance issue, held that the assessee's activities did amount to manufacture. The Tribunal also noted that the Madras High Court's decision in United Bleachers (P.) Ltd.'s case was not relevant, whereas the Bombay High Court's decision was directly applicable and supportive of the assessee's claim.
3. Requirement of Form No. 10D for Section 80J Relief:
The department contended that the assessee was not eligible for section 80J relief as it did not file Form No. 10D along with the return of income. The Tribunal rejected this contention, noting that the Commissioner (Appeals) had correctly pointed out that the requirement of Form No. 10D would become material only in the year when the assessee actually becomes eligible for deduction, i.e., when there are profits in the concerned undertaking. Since the assessee had incurred a loss in the relevant year, the issue was deemed academic and not practically significant.
4. Entitlement to Extra Shift Allowance on Transformers:
The final issue pertained to whether the assessee was entitled to extra shift allowance on transformers used in the textile processing machinery. The department argued that transformers were specifically excluded from extra shift allowance under Part I of Appendix I to rule 5 of the Income-tax Rules. The Tribunal, however, agreed with the assessee that the transformers were an integral part of the textile processing machinery and not independent items. Therefore, they were eligible for extra shift allowance as part of the machinery entitled to the general rate of depreciation.
Conclusion:
The Tribunal dismissed the department's appeals for both assessment years 1979-80 and 1980-81, holding that the assessee was entitled to:
1. Investment allowance under section 32A.
2. Relief under section 80J.
3. Extra shift allowance on transformers used in the textile processing machinery.
The Tribunal also clarified that the requirement of Form No. 10D was not applicable for the assessment year in question, as the assessee had incurred a loss.
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1984 (11) TMI 349
The Supreme Court dismissed the appeal challenging the continuation of Shri Charan Singh as Prime Minister, stating that his appointment was not conditional upon seeking a mandate of the Lok Sabha. The Court held that his continuation in office without taking a fresh oath was not unconstitutional. The appeal was dismissed.
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1984 (11) TMI 348
Issues Involved:
1. Constitutionality of the Maharashtra Vacant Lands (Prohibition of Unauthorised Occupation and Summary Eviction) Act, 1975.
2. Legislative competence of the State Legislature to pass the Act.
3. Violation of Fundamental Rights under Articles 14, 19(1)(f), and 31 of the Constitution.
4. Delegation of excessive and uncanalised powers to the Executive.
5. Validity of the definition of "Vacant Land" under Section 2(f) of the Act.
6. Procedural safeguards and natural justice.
7. Impact of the Emergency Proclamations and subsequent constitutional amendments.
Detailed Analysis:
1. Constitutionality of the Act:
The respondents challenged the Act on the grounds that it violated their fundamental rights under Articles 14, 19(1)(f), and 31 of the Constitution. The Act was found to be discriminatory and violative of Article 14. The Court noted that the Act did not provide any guidelines or safeguards against the arbitrary exercise of discretion by the Competent Authority, which could lead to discriminatory declarations of vacant lands.
2. Legislative Competence:
The Court upheld the finding of the High Court that the State Legislature had the competence to pass the Act under Entries 18, 64, and 65 of List II. However, this did not affect the overall judgment as the Act was found to be unconstitutional on other grounds.
3. Violation of Fundamental Rights:
The Act was found to be violative of Article 14 due to its discriminatory nature. The Act did not provide any procedural safeguards or guidelines for the exercise of discretion by the Competent Authority, leading to arbitrary declarations of vacant lands. The Court did not find it necessary to consider the violation of Article 19(1)(f) due to its deletion by the Forty-Fourth Amendment Act, 1978.
4. Delegation of Excessive Powers:
The Act conferred excessive and uncanalised powers to the Executive, particularly the Competent Authority, without any guidelines or procedural safeguards. This led to arbitrary and discriminatory declarations of vacant lands, violating the principles of natural justice.
5. Definition of "Vacant Land":
The definition of "vacant land" under Section 2(f) was found to be problematic. The Act divided vacant lands into four categories, but the Competent Authority had the discretion to declare any land with unauthorized structures as vacant without any guidelines. This led to arbitrary declarations and unequal treatment of landowners.
6. Procedural Safeguards and Natural Justice:
The Act did not provide for any procedural safeguards or adherence to natural justice principles before declaring land as vacant or evicting occupants. The Competent Authority was not required to give notice or hear affected parties before making declarations or eviction orders. The subsequent Rules of 1979 did not cure the unconstitutionality of the Act as they were introduced much later and did not address all the issues.
7. Impact of Emergency Proclamations and Constitutional Amendments:
The Act was passed during the Emergency period when certain fundamental rights were suspended. However, after the revocation of the Emergency, the Act was not amended to comply with constitutional provisions. The Court noted that the Act would be void if it infringed Articles 14 and 19 of the Constitution after the Emergency was lifted.
Conclusion:
The Supreme Court affirmed the judgment of the High Court, finding the Maharashtra Vacant Lands (Prohibition of Unauthorised Occupation and Summary Eviction) Act, 1975, unconstitutional due to its discriminatory nature and violation of Article 14. The Act conferred excessive and uncanalised powers to the Executive without procedural safeguards, leading to arbitrary declarations of vacant lands. The appeals were dismissed with costs. The Court emphasized the need for carefully conceived legislation to address the issues of unauthorized occupation and eviction in compliance with constitutional provisions.
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1984 (11) TMI 347
Issues involved: Jurisdiction of the VIth Additional City Civil and Sessions Judge to try Sessions Case No. 17/81 without formal transfer from the Principal City Civil and Sessions Judge under Section 194 of the CrPC.
In this case, a complaint led to the registration of a case under Sections 302 and 307 of the Indian Penal Code. The case was transferred between different judges and courts, ultimately leading to the VIth Additional City Civil and Sessions Judge trying the case. The High Court held that the VIth Additional Judge lacked jurisdiction as the case was not formally transferred to him by the Principal City Civil and Sessions Judge under Section 194 of the CrPC. The High Court set aside the conviction and sentence, directing a retrial in accordance with the law. The state of Karnataka appealed this decision to the Supreme Court.
The Supreme Court found the High Court's judgment to be erroneous. It was acknowledged that the VIth Additional Judge could try cases formally transferred to him by the Principal Judge under Section 194 of the CrPC. Despite an error in citing the law, the order transferring the case to the VIth Additional Judge was deemed valid. The Supreme Court held that the VIth Additional Judge had jurisdiction to try the case, overturning the High Court's decision. The appeal was allowed, setting aside the High Court's judgment and directing a hearing on the merits of the case.
Additionally, the respondent requested legal representation for the appeal, leading to Miss Kamini Jaiswal and Mr. Kapil Sibbal, Senior Advocates, assisting the Court. Their support during the appeal was acknowledged and appreciated by the Supreme Court.
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1984 (11) TMI 346
Issues Involved:
1. Legality of the refusal by the State Bank of India to tender the exchange value of high denomination notes.
2. Alleged mala fides by the State Bank of India in informing the Income-tax Department.
3. Authority of the Income-tax Department to attach the exchange value.
4. Petitioner's claim for damages by way of interest for delayed payment.
5. Jurisdiction of the Court under Article 226 to grant relief.
Detailed Analysis:
1. Legality of the Refusal by the State Bank of India to Tender the Exchange Value of High Denomination Notes:
The petitioner tendered 261 high denomination bank notes along with the required declarations to the State Bank of India on January 19, 1978, under the High Denomination Bank Notes (Demonetisation) Ordinance, 1978. The petitioner argued that it was the statutory duty of the respondent bank to credit the total value of the said currency notes to his account. The refusal to tender the exchange value was deemed unlawful and a breach of statutory duty under Section 7 Sub-section (4) of the Ordinance. The bank contended that they acted in accordance with directives from the Reserve Bank of India and had no mala fide intentions.
2. Alleged Mala Fides by the State Bank of India in Informing the Income-tax Department:
The petitioner alleged that instead of tendering the exchange value, the respondent bank informed the Income-tax authorities, leading to harassment, raids, and summonses. The petitioner argued that the bank had no authority to share such information and that it breached the obligation of secrecy between a banker and its constituent. The bank defended its actions by stating that they were following directives from the Reserve Bank of India and the Ministry of Finance, which required them to furnish all particulars regarding the deposit of high denomination notes to the Income-tax Department.
3. Authority of the Income-tax Department to Attach the Exchange Value:
The Income-tax Department issued notices under Section 226(3) and Section 281(b) of the Income-tax Act, attaching the sum of Rs. 2,61,000/- lying deposited with the State Bank of India. The petitioner contended that no income-tax was due and that the attachment was wrongful. The Income-tax Department argued that the attachment was necessary to protect the interest of the revenue pending assessment or re-assessment of the petitioner's income. The department admitted that the house and office of the petitioner had been raided but justified the attachment as a protective measure.
4. Petitioner's Claim for Damages by Way of Interest for Delayed Payment:
The petitioner claimed damages by way of interest for the period during which the exchange value was withheld. The court noted that the claim for interest did not arise under the statute, nor was there an agreement between the parties for the payment of interest. Additionally, no notice under Section 1 of the Interest Act had been served, and the claim for interest was barred by the Law of Limitation. The court held that the claim for interest was not maintainable in a proceeding under Article 226.
5. Jurisdiction of the Court under Article 226 to Grant Relief:
The court discussed the discretionary power under Article 226 to issue writs and provide consequential relief. However, it emphasized that such power should not be used to supersede the modes of obtaining relief by an action in a civil court. The court cited precedents indicating that a writ of mandamus for refund of money is not ordinarily maintainable if the claim can be made in a suit. The court concluded that the petitioner's claim for interest as damages could not be entertained under the writ jurisdiction.
Conclusion:
The court dismissed the petition, holding that the State Bank of India acted in accordance with directives from the Reserve Bank of India and the Ministry of Finance, and that the Income-tax Department's actions were within their authority to protect revenue interests. The claim for interest was deemed not maintainable under Article 226 and barred by the Law of Limitation. The rule was discharged, and all interim orders were vacated.
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1984 (11) TMI 345
Issues Involved:
1. Delay in execution of the death sentence.
2. Reformation and repentance of the petitioner.
3. Application of Article 21 of the Constitution regarding prolonged detention.
Summary:
Delay in Execution of the Death Sentence:
The petitioner, convicted and sentenced to death for multiple murders, has been under the sentence of death for two years and nine months. The Supreme Court considered whether this delay entitles the petitioner to invoke Article 21 of the Constitution. The Court referenced T.V. Vatheeswaran v. State of Tamil Nadu ([1983] 2 S.C.C. 68), which opined that a delay exceeding two years in the execution of a death sentence is sufficient to invoke Article 21. The Court noted that prolonged delay can render the death penalty inhuman and degrading, as it causes excruciating mental anguish and suffering.
Reformation and Repentance of the Petitioner:
The petitioner, aged about 22 years, has shown genuine repentance and a desire to atone for his crimes. The Superintendent of Yeravada Central Prison reported no adverse behavior during his incarceration. The Court acknowledged the sincerity of the petitioner's repentance and his desire to serve humanity if given a chance.
Application of Article 21:
The Court discussed the implications of Article 21 in light of various precedents, including Menaka Gandhi, Sunil Batra, and Bachan Singh. It emphasized that Articles 14, 19, and 21 are not mutually exclusive and that prisoners retain their Fundamental Rights. The Court reiterated that any procedure depriving a person of life or liberty must be just, fair, and reasonable, which includes the execution of a sentence. The Court concluded that prolonged detention awaiting execution constitutes an unjust, unfair, and unreasonable procedure, thus violating Article 21.
The Court also referenced Sher Singh v. State of Punjab, where it was held that the fixation of a two-year time limit for delay does not align with common experience. However, the Court in the present case found that the overall circumstances entitled the petitioner to the protection of Article 21.
Conclusion:
The Supreme Court quashed the death sentence and substituted it with life imprisonment, allowing the petition based on the prolonged delay in execution and the petitioner's genuine repentance.
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1984 (11) TMI 344
Issues Involved:
1. Legality of the Calcutta High Court's practice of granting interim orders on oral applications.
2. Validity of the auction process for the liquor shop at Rangat, Andaman Islands.
3. Compliance and consequences of the Calcutta High Court's orders.
4. Responsibility and authenticity of the parties involved in the Calcutta High Court proceedings.
Summary:
1. Legality of the Calcutta High Court's practice of granting interim orders on oral applications:
The Supreme Court condemned the practice followed by the Calcutta High Court of granting interim orders on oral applications without any written record. The Court stated, "It is a practice to be strongly deprecated, a practice reminiscent of the feudal days when the French nobility could procure a lettre de cachet under the Sovereign's seal authorizing a subject's imprisonment without trial and without mention of any reason." The Court emphasized that such a practice is "unhealthy and likely to lead to harm and abuse" and forbade it under Art. 141 of the Constitution.
2. Validity of the auction process for the liquor shop at Rangat, Andaman Islands:
An auction for the right to sell liquor at Rangat was held on 28.3.1984, where M/s Samarias Trading Co. Pvt. Ltd. was the highest bidder with a bid of Rs. 25 lakhs. The auction was confirmed, and the license was to be effective from 1.4.1984 to 31.3.1985. However, an ex-parte order from the Calcutta High Court directed the maintenance of status quo, which affected the confirmation of the auction.
3. Compliance and consequences of the Calcutta High Court's orders:
The Calcutta High Court's order was made on an oral application without any written petition, leading to a status quo order affecting the auction. The Division Bench of the Calcutta High Court later set aside the auction and directed a fresh auction with a reserved price of Rs. 30 lakhs. The Supreme Court found the procedure adopted by the Calcutta High Court to be flawed, emphasizing the need for open court proceedings and written records to ensure transparency and fairness.
4. Responsibility and authenticity of the parties involved in the Calcutta High Court proceedings:
The Supreme Court noted that the person who moved the application in the Calcutta High Court, claiming to be S. Samuel, was of doubtful existence. An affidavit by S. Samuel disclaimed any instruction to file a writ petition, raising questions about the authenticity of the proceedings. The Court issued notices to various parties, including advocates involved, to explain their actions. The Supreme Court directed the withdrawal of the demand for additional payment from M/s Samarias Trading Co. Pvt. Ltd. and allowed the appeal.
Conclusion:
The Supreme Court allowed the appeal, directing the withdrawal of the additional demand and issuing notices for contempt proceedings against George Joseph for breaching an undertaking. The Court emphasized the need for written records and open court proceedings to maintain the integrity of the judicial process.
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1984 (11) TMI 343
Issues Involved:
1. Jurisdiction and competence of the Assistant Collector to modify an approved price-list.
2. Applicability and interpretation of Rule 10 of the Central Excise Rules.
3. Limitation period for issuing a show cause notice under Rule 10.
4. Finality of an approved price-list under Rule 173C.
Detailed Analysis:
1. Jurisdiction and Competence of the Assistant Collector:
The primary issue was whether the Assistant Collector had the jurisdiction and competence to revise an approved price-list. The appellants argued that the modification amounted to a review which could only be done by the Central Board of Excise and Customs under Section 35A of the Central Excises and Salt Act, or if Rule 10 was properly complied with. The Tribunal found that the Assistant Collector was competent to revise the approval based on the Delhi High Court's decision in the Bawa Potteries case, which upheld the Assistant Collector's authority to modify an earlier approval if it was based on an erroneous view.
2. Applicability and Interpretation of Rule 10:
The appellants contended that Rule 10 was not applicable as no show cause notice was issued before the Assistant Collector's letter dated 9-8-1976. The Tribunal, however, held that Rule 10 was applicable as there was a prima facie short-levy. The Tribunal referred to the Bawa Potteries case, which allowed for the review of earlier decisions under Rule 10 if the earlier decision was erroneous due to "inadvertence, error, collusion, or misconstruction on the part of an officer." The Tribunal found that the conditions for invoking Rule 10 were satisfied as a show cause notice was issued on 16-10-1976.
3. Limitation Period for Issuing a Show Cause Notice:
The appellants argued that the demands were time-barred. The Tribunal referred to the decisions in the Bawa Potteries and Triveni Sheet Glass Works cases, which clarified that the limitation period under Rule 10 would run from the date of assessment by the Central Excise authorities on the RT-12 Return. Since all assessments were made between 28-1-1976 and 8-12-1976, the show cause notice issued on 16-10-1976 was deemed to be within the limitation period.
4. Finality of an Approved Price-List under Rule 173C:
The appellants argued that Rule 173C intended to give finality to an approved price-list. The Tribunal acknowledged this but preferred the Delhi High Court's decision in the Bawa Potteries case over the Calcutta High Court's decision in the Union Carbide case. The Tribunal concluded that Rule 173C did not explicitly disallow amendments initiated by the Central Excise authorities and that such amendments were permissible under the parameters laid down by the Delhi High Court.
Separate Judgment by M. Gouri Shankar Murthy, Member (J):
In a dissenting opinion, Member (J) M. Gouri Shankar Murthy argued that a power of review must be expressly granted or implied by necessary implication. He contended that Rule 173C did not confer a power of review for an approved price-list and that any alteration should be prospective, not retrospective. He also emphasized that Rule 10 did not apply to the review of an approved price-list as it dealt with short-levy or erroneous refund in consequence of an assessment, not the approval of a price-list. He concluded that the appeal should be allowed.
Conclusion:
In the majority view, the Tribunal found that the Assistant Collector's order was not lacking in competence or jurisdiction, nor was it time-barred. The revised method for arriving at the assessable value was correct, and the appeal was rejected. The dissenting opinion held that no power of review was conferred under Rule 173C, and therefore, the appeal should be allowed. However, the majority decision prevailed, and the appeal was rejected.
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1984 (11) TMI 342
Issues Involved:
1. Valuation for levy of Central Excise duty on vegetable product.
2. Interpretation of "duty of excise leviable thereon" before and after 1-10-1975.
3. Applicability of the Explanation inserted by Section 47 of the Finance Act, 1982.
4. Reopening of completed assessments.
5. Inclusion of refunded duty in the assessable value.
Issue-wise Detailed Analysis:
1. Valuation for Levy of Central Excise Duty on Vegetable Product:
The appeals related to the valuation for the levy of Central Excise duty on vegetable products eligible for partial exemption under Notification No. 23/75-C.E., dated 1-3-1975, and its predecessor Notification No. 230/72, dated 15-12-1972. The exemption was based on the proportion of indigenous cotton seed oil used in the manufacture of the vegetable product, with different rates of exemption specified in the Table annexed to the Notification.
2. Interpretation of "Duty of Excise Leviable Thereon" Before and After 1-10-1975:
For the period prior to 1-10-1975, the appellants relied on the Delhi High Court judgment in Modi Rubber Ltd., which held that the duty to be deducted should be the duty without taking into account the relief given in terms of the exemption notification. For the period from 1-10-1975 onwards, the Explanation inserted by Section 47 of the Finance Act, 1982, defined "value" in relation to any excisable goods and made it clear that the effective amount of duty of excise payable on the goods under assessment should alone be taken into account.
3. Applicability of the Explanation Inserted by Section 47 of the Finance Act, 1982:
The Explanation inserted by Section 47 of the Finance Act, 1982, was made retrospective from 1-10-1975 to 27-2-1982. It clarified that the duty of excise payable on any excisable goods should be the sum total of the effective duty under the Central Excises and Salt Act and the aggregate of the effective duties under other Central Acts. The Tribunal held that for the period from 1-10-1975 onwards, the expression "duty of excise leviable thereon" should be taken as referring to the effective duty of excise.
4. Reopening of Completed Assessments:
The Department argued that assessments could be reopened if there was material to show that there was a short levy for any of the reasons set out in Rule 10 of the Central Excise Rules. The Tribunal found it difficult to accept the argument that the old Section 4 should be read as if it contained the Explanation added by Section 47 of the Finance Act, 1982, for the period prior to 1-10-1975. The Tribunal concluded that the reopening of assessments should be based on specific statutory provisions and not on assumptions or presumptions.
5. Inclusion of Refunded Duty in the Assessable Value:
The Tribunal observed that the effective duty of excise should be computed by taking into account any exemption available to the goods. The Tribunal rejected the argument that the assessable value should be recalculated by including the benefit of the exemption. The Tribunal held that the duty refunded could not be considered as part of the price and that the assessable value should be the price shorn of the element of duty.
Conclusion:
The Tribunal upheld the orders of the lower authorities and rejected the appeals for the period from 1-10-1975 onwards, holding that the effective duty of excise should be considered for the valuation. For the period prior to 1-10-1975, the Tribunal followed the Bombay High Court judgment in Tata Oil Mills, which supported the view of the Central Excise authorities. The Tribunal concluded that the expression "duty of excise leviable thereon" should refer to the duty after giving full effect to the exemption notification for both periods. The dissenting opinion by Member (Judicial) M. Gouri Shankar Murthy argued that the assessable value should not include the refunded duty and that the reopening of assessments was not justified. However, the majority view prevailed, and the appeals were rejected.
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1984 (11) TMI 341
Issues Involved:
1. Whether the payment made by the appellants is a Customs duty.
2. Is the claim of the appellants barred under Sec. 27(1) of the Customs Act, 1962.
3. Whether the Customs Act prohibits the Customs Authorities from refunding the amounts other than Customs duty.
Detailed Analysis of the Judgment:
1. Whether the payment made by the appellants is a Customs duty:
The appellants imported two crates of Cold Rolled Stainless Steel Sheets, but one crate did not land in India. The Bombay Port Trust issued a short-landing certificate for the missing crate. The appellants paid duty on both crates but later sought a refund for the duty paid on the short-landed crate. The Tribunal noted that no duty could be levied on goods that did not land in India. The payment made by the appellants for the short-landed crate should be treated as a deposit, not as a Customs duty. The Act does not prescribe any period of limitation for refunding such deposits.
2. Is the claim of the appellants barred under Sec. 27(1) of the Customs Act, 1962:
Section 27(1) of the Customs Act, 1962, deals with the refund of duty paid. The Tribunal highlighted that for Section 27(1) to apply, three conditions must be met:
- The refund claim should be for Customs duty.
- The payment should be in pursuance of an order of assessment made by an officer of Customs lower in rank than an Assistant Collector.
- The claim should be made within six months from the date of payment.
Since the payment made by the appellants was not Customs duty but a deposit, Section 27(1) does not apply. The Tribunal referred to the Bombay High Court's decision in Indian Dairy Corporation v. Union of India, which held that the limitation period under Section 27(1) does not apply to payments made without jurisdiction. The Tribunal concluded that the levy of duty on short-landed goods was without jurisdiction, making the limitation period under Section 27(1) inapplicable.
3. Whether the Customs Act prohibits the Customs Authorities from refunding the amounts other than Customs duty:
The Tribunal examined whether the Customs Act prohibits refunds of payments not made towards Customs duty. It noted that the Customs authorities function in dual capacities: as administrative/executive officers and as adjudicating authorities. The Act does not explicitly prohibit refunds of amounts not considered as Customs duty. The Tribunal referred to the Supreme Court's decision in Patel India Ltd. v. Union of India, which held that if a payment does not fall under the scope of the relevant refund provision, the authorities cannot retain the excess amount without legal authority. The Tribunal concluded that since the payment in question was not towards Customs duty, the Customs Act does not prohibit its refund. Therefore, the authorities have the right to order refunds outside the purview of Section 27.
Conclusion:
The Tribunal allowed the appeal, setting aside the orders passed by the lower authorities. It directed that the appellants be granted consequential relief, emphasizing that the payment made for the short-landed crate was not Customs duty and thus not subject to the limitations of Section 27(1) of the Customs Act, 1962.
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1984 (11) TMI 340
The Collector of Central Excise (Appeals), Calcutta considered the appeal regarding duty on samples drawn by an appellant firm. The firm maintained a Sample Register and argued that the demand for duty was time-barred and unjustified as samples were drawn at a stage prior to the required point for duty accounting. The Collector allowed the appeal, setting aside the Assistant Collector's order and directing a refund. (Case citation: 1984 (11) TMI 340)
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1984 (11) TMI 339
Issues Involved:
1. Whether the process of cutting, drilling, and welding of steel materials by the respondents constitutes "manufacture" under the Central Excises and Salt Act, 1944.
2. Classification of fabricated steel structures under Tariff Item 68 (T.I. 68) of the Central Excise Tariff.
3. The applicability of prior judicial decisions and Board's orders to the current case.
Issue-wise Detailed Analysis:
1. Whether the process of cutting, drilling, and welding of steel materials by the respondents constitutes "manufacture" under the Central Excises and Salt Act, 1944:
The Deputy Collector of Central Excise, Visakhapatnam, initially held that the processes undertaken by the respondents (cutting, drilling, and welding of steel materials) did not result in the manufacture of new goods. He relied on the Supreme Court's judgment in the case of Delhi Cloth and General Mills Company Limited and other relevant decisions, concluding that no new commodity with a distinct name, character, or use emerged from these processes. The Collector of Central Excise, Guntur, however, contested this view, arguing that the processes brought into existence identifiable parts of a structure, thus constituting manufacture. He cited the decision of the CEGAT Special Bench in M/s. Structurals and Machineries v. Collector of Central Excise, Patna, which supported his stance. The respondents countered that their activities did not involve complicated or intricate processes and that the items were not sold as goods in the market but were specific to the construction project.
2. Classification of fabricated steel structures under Tariff Item 68 (T.I. 68) of the Central Excise Tariff:
The Deputy Collector concluded that the fabricated items did not fall under T.I. 68 as they did not lose their identity as plates, channels, angles, and beams after the processes of cutting, drilling, and welding. The Collector disagreed, asserting that the fabricated items like beams, trusses, and bracings were known to the public and should be treated as goods under T.I. 68. The respondents argued that the fabricated items were not goods in themselves but components of a larger structure, which ceased to be movable after erection. They emphasized that the items were not brought to the market for sale but were tailor-made for the specific project.
3. The applicability of prior judicial decisions and Board's orders to the current case:
The respondents relied on several judicial decisions and Board's orders, including the Supreme Court's judgment in the case of Delhi Cloth and General Mills Company Limited, the decision of the Government of India in M/s. Otis Elevators Company (I) Limited, and the CBEC's decision in M/s. Hindustan Steel Works Construction Limited. They argued that these precedents supported their claim that the processes did not constitute manufacture. The Collector, however, referenced the decision of the CEGAT Special Bench in M/s. Structurals and Machineries v. Collector of Central Excise, Patna, which he believed was more relevant to the case at hand. The respondents contended that this decision was not applicable as it pertained to more intricate and involved processes, unlike their simpler activities.
Conclusion:
The authority concluded that the processes of cutting, drilling, and welding performed by the respondents did not amount to manufacture. It was determined that the raw materials retained their original identity and no new commodity with a distinct name, character, or use emerged. The decision of the Deputy Collector to drop the proceedings against the respondents was upheld, rejecting the application by the Collector of Central Excise, Guntur. The authority emphasized that each case must be examined individually, and the determination of manufacture should be based on the specific facts and the general principles laid down by the Supreme Court in the cases of DCM and South Bihar Sugar Mills.
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