indo National Limited Vs. Union of India - Court Judgment

Excerpt:
central excise - tariff items--words and phrases--zinc strips--zinc cans used as anodes in manufacture of battery cells--liable to duty under item 26b(2)--manufacture of such zinc strips without central excise licencee--penalty--confiscation--show cause notice--central excises and salt act (1 of 1944), schedule i, item 26b(2)--central excise rules, 1944, rule 173q. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the action only on grounds enumerated in sub-section (2) of section 149 of the act, and no other grounds are available to it. the insurer is not allowed to contest the claim of the injured or heirs of the deceased on other grounds, which are available to the insured. if insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer and will be negation of the intention of the legislature and annihilate mandate of the provisions of sections 170 and 149 of the act. the insured can pursue appeal only after giving up the insurer as the appellant and not otherwise. in the instant case, the insurer has not withdrawn from party array but has remained prosecuting the appeal with the insured on the grounds which are available only to the insured. therefore, the joint appeal as filed by the insured and the insurer is not maintainable. section 166: [v. gopala gowda & jawad rahim, jj] claim for compensation accident due to mechanical defect in the vehicle held, it is not in dispute that the claimant suffered injuries in an accident, which occurred during the course of his employment, albeit due to his negligence but law does not render him remediless. statutory right is conferred on him, accruing by virtue of his employment under insured to claim compensation under workmens compensation act. the insurer is statutorily duty bound to discharge the liability of the owner of the vehicle, to pay such compensation to the employee, as mandated under the provisions of section 149 of the act. the right of an injured employee or his dependents as the case may be to be compensated, when injury is suffered or death occurs during his employment, is recognised not only under workmens compensation act, but also under benevolent provisions under section 166 and 167 of the m.v. act. the right of driver to seek compensation is not restricted only to the workmens compensation act, it has been enlarged to enable such person to seek just compensation (sections 166 and 168), conferring upon him the right of election engrafted under section 167 of the act to choose either of the two forum. the only defence which the insurer could take is limit of its liability as enumerated under section 147 of the act, leading to contest, inter alia, only between insured and insurer and does not impact claimants right to recover the compensation determined by the tribunal which crystallizes into enforceable right against both. in the instant case, the claimant/driver has exercised right of election under section 167 of the act to seek compensation under section 166 of the act resulting in award passed by the tribunal. therefore, the insured and the insurer have no escape but to discharge the said award as directed. undisputedly, in this case as deduced for proved facts, the vehicle in question was not properly maintained by the owner and despite faulty brake system, the claimant had undertaken the hazardous journey to his peril at the behest of and at the instruction of the owner. the owner is therefore, tortfeasor. section 168: [v. gopala gowda & jawad rahim, jj] insurers limit of liability - held, it is well settled that the liability of the insurance company for payment of compensation can be statutory or contractual. is for the insurance company to show that the insurance policy was a statutory policy and not a contractual policy to restrict its liability. that issue was neither raised before the tribunal nor is raised in this appeal requiring decision. thus, if at all the insurer has any valid ground to restrict its liability, it can proceed against the insured but firstly it has to discharge the award as required under section 149 (1) of the act. where the owner/insured has failed to maintain the vehicle as per prescribed safety standards and has caused the claimant to drive the vehicle with mechanical defects, the owner would be the tortfeasor and the claimant can maintain a petition seeking compensation under the provisions of the act, instead of seeking compensation under the workmens compensation act. on facts, held, the material evidence on record, particularly, with regard to the income of the claimant, his age, medical evidence and the evidence relating to pecuniary loss has not been considered by the tribunal in the correct perspective, which has resulted in passing of the impugned award, disproportionate to the pecuniary loss and the loss of future income of the victim. the settled principles governing determination of compensation has been given a go-bye. compensation of rs.4,15,150/- awarded by the tribunal was enhanced to rs.8,20,000/-. jeevan reddy, j.1. the petitioner is a limited company manufacturing dry battery cells known as 'nippo batteries', having its factory at nellore, andhra pradesh. the petitioner says that for the purpose of manufacturing dry battery cells, the petitioner imports zinc ingots from foreign countries through the minerals and metal trading corporation of india and that the zinc ingots are then melted in a furnace in their factory adding cadmium and lead as alloys. then they are made into bars called `bus bars'. these bars are rolled to required thickness, the edges being unspecified and they are then fed into punching power press, whereby hexagonal shaped pellets are punched. these pellets will then be lubricated with graphite powder and extruded into zinc cans which are used as anodes in the manufacture of battery cells. the central excise authorities sought to levy duty upon the zinc bars treating them as `zinc strips' within the meaning of tariff item no. 26(b)(2) of the first schedule to the central excises and salt act, 1944. a show cause notice was issued calling upon the petitioner to show cause why the zinc strips manufactured without a central excise licence should not be confiscated under rule 173q of the central excise rules, 1944 and why a penalty should not be imposed upon the petitioner. he was also called upon to show cause why duty should not be levied upon the bars. the petitioner submitted his explanation contending that the bars obtained by the melting of zinc ingots are not excisable goods and, therefore, they cannot be subjected to duty as zinc strips. it was also contended that the said bars cannot be regarded as manufactured goods since they are obtained only during the course of manufacturing process and do not constitute a new or finished product, which is marketable. 2. these contentions were overruled by the deputy collector, central excise, hyderabad, by his order dated 5-5-1975, which was confirmed in appeal by the appellate collector and also by the government of india in revision. 3. the central excise authorities have negatived the petitioner's contentions relying upon the decision of the allahabad high court in geep flash light industries v. union of india and others - 1979 e.l.t. 674. we have perused the decision and we agree with the reasoning and the conclusion arrived at by the learned judges. we are told that against the decision of the allahabad high court, an appeal is now pending in the supreme court. be that as it may, in view of the decision of the allahabad high court, no specific arguments were addressed before us as to why we should take a different view from that of the allahabad high court. we, therefore, dismiss this writ petition, but, in the circumstances, without costs. 4. mr. p. ramachandra reddy, the learned senior advocate on behalf of the writ petitioner, makes an oral request for grant of leave to appeal to supreme court under article 133 of the constitution of india. in view of the fact that the supreme court is stated to have granted special leave against the decision of the allahabad high court, which we have followed herein, and the appeal is now said to be pending in the supreme court, we are inclined to grant a certificate under article 133 of the constitution of india. the said certificate shall issue accordingly. 5. mr. ramachandra reddy makes a further request that the collection of the duty may be stayed for a period of two months to enable the petitioner to approach the supreme court and obtain appropriate orders. in the circumstances of the case, we direct that the duty payable by the writ petitioner in view of the dismissal of the writ petition, shall not be collected for a period of two months.