The Supreme Court has ruled that the Companies Act shall prevail over the Kerala Revenue Recovery Act though the latter is a special legislation. 
 
In this case, Kerala State Financial Enterprises Ltd versus Official Liquidator, a company dealing in securities could not repay the loans to the state financial company. Its properties were attached. The government company proceeded to sell the assets of the debtor company, which went to the high court. 
 
The court prevented the government company from proceeding. It appealed to the Supreme Court, which said attachment did not grant it the right to deal with the assets further. Attachment is meant to prevent the transfer of property and is a sort of guarantee that the claimants will get their dues, the judgment explained. 
 
No excise on zinc dross 
 
The Supreme Court has dismissed an appeal of the Commissioner of Central Excise in its dispute with Indian Aluminium Co Ltd and asserted that zinc dross and flux skimming do not attract excise. 
 
These items are byproducts from the melting furnace during the manufacture of aluminium sheets. The authorities argued that these not only marketable but also contain high percentage of aluminium, sometimes up to 78 per cent. 
 
The value of dross sometimes exceeded that of aluminium, it was argued. However, the Supreme Court accepted the contention of the company that dross was not a manufactured product. An article was not exigible to a tax only because it had some saleable value, the judgment said. 
 
Judgment on gratuity 
 
An employee claiming gratuity cannot take the best from the contract with the employer as well as from the Payment of Gratuity Act, the Supreme Court has said in Beed Dist Central Cooperative Bank versus State of Maharashtra. 
 
Under the Act, an employer is entitled to give better terms to employees than those given in the law. The bank calculated gratuity on the basis of 26 days for each completed year with a ceiling of Rs 2.50 lakh. 
 
The Act calculates on the basis of 15 days for each year with a ceiling of Rs 3.5 lakh. The employees who got their gratuity according to the 26-day scheme demanded that their ceiling should be according to the Act. The labour commissioner and the Bombay High Court accepted their argument. The bank appealed to the Supreme Court, which set aside the high court judgment. 
 
Transport charges out of cargo valuation 
 
The Supreme Court has set aside a ruling of the Customs, Excise & Gold (Control) Appellate Tribunal and ruled that the charges for transportation of goods by barges from the mother ship at Bombay Floating Light (BFL) to the Dharmtar Jetty could not be added to the valuation of the imported goods for the purposes of levying Customs duty. 
 
In Ispat Industries Ltd versus Commissioner of Customs, a cargo carrying iron ore pellets was anchored at BFL. After provisional assessment, the cargo was ferried in barges to the jetty. 
 
The Customs authorities then issued a notice to the company for inclusion of the freight incurred on barges and other associated charges for determining the correct value. 
 
This was challenged by the company. On appeal, the Supreme Court said the place of import was not relevant in this case as the cost of transportation had already been paid to the seller in the CIF or FOB contract.

M J Antony