Issues Involved:
1. Jurisdiction of the Civil Court in the presence of an arbitral clause.
2. Validity of the arbitration agreement and whether it can be challenged in Civil Court.
3. Appropriateness of granting an injunction to restrain parties from proceeding with arbitration.

Detailed Analysis:

1. Jurisdiction of the Civil Court in the Presence of an Arbitral Clause:
The judgment discusses the jurisdiction of Civil Courts under the Arbitration and Conciliation Act, 1996, specifically sections 8, 16, and 45, read with section 9 of the Code of Civil Procedure, 1908. Despite the presence of an arbitral clause, the Civil Court retains jurisdiction to entertain suits and decide disputes. Section 8 mandates that if the subject matter of the suit is covered by an arbitral clause, the court must direct the parties to arbitration. However, section 16 empowers the arbitral tribunal to rule on its jurisdiction, including the validity of the arbitration agreement. The judgment references the Supreme Court's decision in P. Anand Gajapathy Raju v. P.V.G. Raju and Konkan Railway Corpn. Ltd. v. Rani Construction (I) Ltd. to support this interpretation.

2. Validity of the Arbitration Agreement:
The court examines whether a Civil Court can proceed with a suit challenging the validity of an arbitration agreement under section 45 of the Arbitration and Conciliation Act, 1996. Section 45 allows the court to examine if the arbitration agreement is "null and void, inoperative or incapable of being performed" before referring parties to arbitration. The judgment discusses the doctrine of severability, which treats the arbitration clause as an independent agreement, even if the main contract is deemed invalid. This doctrine is recognized under both Indian and English law, as seen in Harbour Assurance Co. (UK) Ltd. v. Kansa General International Insurance Co. Ltd. and Prima Paint Corpn. v. Flood & Conklin Mfg. Co.. The court concludes that the arbitral tribunal has jurisdiction to decide on the validity of the arbitration agreement.

3. Appropriateness of Granting an Injunction:
The court considers whether it is appropriate to grant an injunction to restrain the respondents from proceeding with arbitration. The judgment notes that the arbitral clauses in the agreements specify that disputes shall be governed by English law and arbitration shall be conducted in the UK. The court refers to Russell on Arbitration and various English cases, including Heyman v. Darwins Ltd. and Rremer Vulkan Schiffbau Und Maschinenfabrik v. South India Shipping Corpn., to highlight that English law does not favor consolidation of arbitral proceedings without party agreement. The court finds no prima facie evidence that the arbitration clauses are invalid. The court also notes that the appellants have invoked the arbitral process, indicating acquiescence. Consequently, the court denies the injunction, allowing the arbitral proceedings to continue.

Conclusion:
The appeal is dismissed, affirming that:
- Civil Courts retain jurisdiction even with an arbitral clause, but must refer parties to arbitration if conditions under section 8 are met.
- The validity of the arbitration agreement can be challenged in Civil Court under section 45, but the arbitral tribunal has the authority to rule on its jurisdiction.
- An injunction to restrain arbitration is inappropriate if the arbitral clause is valid and the parties have chosen arbitration as their dispute resolution forum.

Issues:
1. Maintainability of petition for review under Order 47.
2. Whether a party not involved in the proceedings can seek a review.
3. Interpretation of "person aggrieved" under Order 47 rule 1.
4. Conditions for filing a review application.
5. Review of an order in a company petition regarding creditor status and unpaid debts.

Issue 1: Maintainability of petition for review under Order 47
The High Court addressed the contention that a petition for review under Order 47 was not maintainable. It clarified that the power of review must be conferred for its exercise. The court highlighted that even though functioning as a company court, it retains the power of review as a Civil Court. The absence of specific rules under the Companies Act implies the applicability of the procedure provided under the Code of Civil Procedure, including Order 47.

Issue 2: Review by a party not involved in the proceedings
The court deliberated on whether a party not part of the original proceedings could seek a review. Order 47 rule 1 allows an application for review by any person aggrieved by a decree or order, while rule 2 limits this power to a party to the proceeding. Legal precedents were cited to support the broader interpretation of "person aggrieved" compared to the term "party." The court emphasized that a person not directly involved in the proceedings could still file a review application under Order 47 rule 1.

Issue 3: Interpretation of "person aggrieved" under Order 47 rule 1
The court analyzed the scope of the term "person aggrieved" under Order 47 rule 1 and affirmed the wider amplitude of this expression compared to "party" under rule 2. Citing relevant judgments, the court concluded that a review application could be maintained by a person aggrieved within the prescribed period of limitation, rejecting the narrower interpretation advocated in certain judgments.

Issue 4: Conditions for filing a review application
To maintain an application for review, the court outlined two essential tests: the party must be aggrieved, and the review must be filed within the prescribed period of limitation, subject to the provisions of the Limitation Act. Legal precedents were cited to support the view that a review by a party aggrieved and filed within the limitation period is permissible, contrary to the restrictive interpretation in a specific Delhi High Court judgment.

Issue 5: Review of an order in a company petition regarding creditor status and unpaid debts
The court considered a review application seeking to challenge an order in a company petition related to creditor status and unpaid debts. It analyzed the petitioner's claim of being a creditor based on mesne profits and municipal taxes. The court clarified that mesne profits constitute damages and do not amount to debt until a decree is passed. It assessed the petitioner's entitlement to notice under the Companies Act, emphasizing the need for clear evidence of indebtedness. The court concluded that the circumstances did not warrant a review of the earlier order confirming the resolution of share capital reduction, as the petitioner's claims did not establish a debt owed by the company at the time of the petition.

This detailed analysis of the judgment provides a comprehensive understanding of the legal issues addressed by the High Court in the case.

Issues Involved:
1. Accrual of Dividend Income
2. System of Accounting for Non-Resident Assessee

Detailed Analysis:

(A) Accrual of Dividend Income:

The central issue in this case is the determination of the year in which the dividend income accrued to the non-resident assessee. The Department argued that the income accrued on the date when Pfizer Limited declared the dividend. In contrast, the assessee contended that the income accrued only when the Reserve Bank of India (RBI) granted approval for the remittance under the Foreign Exchange Regulation Act (FERA).

The court examined sections 5(2)(b), 8, and 9(1)(iv) of the Income-tax Act, 1961. Section 5(2)(b) states that the total income of a non-resident includes income that accrues or is deemed to accrue in India. Section 9(1)(iv) extends section 5(2)(b) by deeming that a dividend paid by an Indian company outside India constitutes income accruing in India. The court concluded that section 9(1)(iv) stipulates that dividend income paid to a non-resident is deemed to accrue in India only upon payment, not upon declaration.

Additionally, the court noted that section 8, which deals with dividend income, is part of the computation machinery and not a charging section. Therefore, the declaration of a dividend must be effective, which in this case required RBI approval under FERA. The debt or right to receive the dividend crystallized only upon such approval.

The court held that the final dividend of Rs. 25.20 lakhs became taxable in the assessment year 1977-78 when the RBI granted approval, not in the assessment year 1976-77 when the dividend was declared. Similarly, the final dividend of Rs. 29.40 lakhs became taxable in the assessment year 1978-79 when the RBI granted approval, not in the assessment year 1977-78 when the dividend was declared.

(B) System of Accounting for Non-Resident Assessee:

The second issue concerned whether the non-resident assessee could be assessed based on the cash system of accounting. Historically, up to the assessment year 1975-76, the Department accepted the assessee's cash basis accounting. However, from the assessment year 1976-77 onwards, the Department directed the assessee to adopt the mercantile system of accounting.

The court referred to the judgment in CIT v. Standard Triumph Motor Co. Ltd., where it was held that non-residents receiving income outside India could be assessed on an accrual basis under section 5(2)(b) and not on a cash basis under section 5(2)(a). However, the court found that this judgment did not apply to the present case as the assessee had consistently followed the cash system of accounting, which was accepted by the Department until the assessment year 1975-76.

The court emphasized that section 145(1) of the Income-tax Act, which deals with the method of accounting, is part of the computation machinery and not a charging section. Therefore, non-resident assessees are free to adopt either the cash or mercantile system of accounting, provided the real income can be deduced. The court also cited the case of CIT v. Citibank N.A., where the hybrid system of accounting was approved.

The court concluded that the assessee was entitled to follow either the cash or mercantile system of accounting, subject to the proviso to section 145(1) as it stood before April 1, 1997, which allows the Assessing Officer to determine the computation basis if the income cannot be properly deduced.

Conclusion:

1. The court answered question No. 1 in the negative, in favor of the assessee, holding that the dividend income accrued in the year the RBI granted approval, not in the year the dividend was declared.
2. On question No. 2, the court held that the assessee was free to follow either the cash or mercantile system of accounting, subject to the proviso to section 145(1) as it stood before April 1, 1997.

The reference was disposed of with no order as to costs.

Issues Involved:

1. Ownership and Benami Transaction
2. Evidence and Burden of Proof
3. Applicability of the Benami Transactions (Prohibition) Act, 1988

Issue-wise Detailed Analysis:

1. Ownership and Benami Transaction:

The primary issue in this case was whether the property in question, purchased in the name of defendant No. 1, was actually owned by the plaintiff's father and held benami. The plaintiff claimed that the property was bought by his father in the name of his mother (defendant No. 1) using his business income. Conversely, the defendants argued that defendant No. 1 purchased the property using her stridhan and funds from her father and tenants. The court examined the principles of benami transactions, noting that the burden of proof lies on the person asserting the benami nature of the transaction. The court emphasized that the intention behind the transaction must be clearly established through cogent evidence.

2. Evidence and Burden of Proof:

The court scrutinized the evidence presented by both parties. The plaintiff's evidence was deemed insufficient and not corroborated by independent proof. The plaintiff failed to prove the father's financial contribution to the purchase and construction of the property. Conversely, defendant No. 1 provided a plausible explanation for her financial means, including rental income and funds from her father. The court highlighted that mere suspicion or conjecture cannot substitute for solid proof in establishing a benami transaction. The plaintiff's failure to provide definitive evidence meant that the initial presumption in favor of the apparent state of affairs (i.e., the property belonging to defendant No. 1) remained unchallenged.

3. Applicability of the Benami Transactions (Prohibition) Act, 1988:

The appellant raised the issue of the suit's maintainability under Section 4(1) of the Benami Transactions (Prohibition) Act, 1988. The court referred to the Supreme Court's ruling in R. Rajagopal Reddy v. Padmini Chandrasekharan, which clarified that the Act does not have retrospective effect and does not apply to suits filed before its enactment. Additionally, Section 3(2) of the Act presumes that a property purchased by a person in the name of his wife is for her benefit unless proven otherwise. The court found no evidence to rebut this statutory presumption, further weakening the plaintiff's case.

Conclusion:

The court concluded that the plaintiff failed to prove that the property was a benami transaction. The judgment and decree of the trial court were set aside, and the suit was dismissed. The appeal succeeded, and no order as to costs was made.

Order:

The appeal is allowed, and the judgment and decree dated 6th January, 1993, passed by the City Civil Court, 6th Bench in Title Suit No. 2358 of 1981, are set aside. The Title Suit No. 2358 of 1981 is dismissed.

Appeal succeeds.

Issues:
1. Application under sections 34(3) and 43 of the Arbitration and Conciliation Act, 1996.
2. Entertaining objections under the proviso to sub-section (3) of Section 34 of the Act of 1996.
3. Legality of objections under OMP 367/01.
4. Condonation of delay in re-filing the objections.

Analysis:

Issue 1:
The Objector filed I.A. 10715/01 under sections 34(3) and 43 of the Arbitration and Conciliation Act, 1996, challenging the award dated 30th June 2001. The Objector sought to entertain objections under the proviso to sub-section (3) of Section 34 of the Act of 1996 due to being prevented from filing objections within the prescribed period. Another application, I.A.11576/01, was filed to explain the circumstances under which the Objector believed the award was governed by the Act of 1940 and not the Act of 1996.

Issue 2:
The Non-Objector/claimant did not file a reply to the applications. The court considered the history of the case, including the dismissal of an application under section 14 of the Act of 1940 and subsequent appeals, to determine the maintainability of the objections under OMP 367/01. The court found that previous orders did not prevent the Objector from seeking to entertain objections under the proviso to sub-section (3) of Section 34 of the Act of 1996.

Issue 3:
A preliminary objection was raised regarding the legality of objections under OMP 367/01. The Objector's counsel argued that there was sufficient cause for entertaining the objections, even though they were filed beyond the prescribed period. The court examined previous cases to establish the principle that re-filing objections after removing defects relates back to the original presentation.

Issue 4:
The court considered the question of condonation of delay in re-filing the objections. Citing precedents, the court found that the defects pointed out by the Registry were not substantial enough to render the objections invalid. The court concluded that there was sufficient cause for entertaining the objections filed on 29th October 2001, despite the delay, and allowed the applications accordingly.

In conclusion, the court allowed the objections (OMP 367/01) to be entertained under the proviso to sub-section (3) of Section 34 of the Act of 1996, considering the circumstances and legal principles discussed in the judgment.

The Supreme Court dismissed the appeal in the case with citation 2002 (11) TMI 773 - SC. Justices Ruma Pal and B.N. Srikrishna were involved in the decision.

Issues:
1. Disallowance of foreign traveling expenses for the Director of the Company.
2. Disallowance of deduction under section 80-IA due to lack of business income.

Issue 1: Disallowance of foreign traveling expenses
The Appellate Tribunal ITAT Chandigarh dealt with an appeal concerning the disallowance of foreign traveling expenses incurred by the Director of the Company. The Assessing Officer disallowed the expenses as not being for business purposes due to lack of concrete evidence of business meetings or trade transactions during the visits to U.K., France, and Switzerland. The CIT(A) allowed a relief of Rs. 3,12,835, holding that the tour was undertaken to explore export possibilities as per the company's directions. The Director visited these countries to study the export market for hosiery goods. The Tribunal noted that the company provided details of the visits, companies met, and days spent, which were considered sufficient. The disallowance was deemed unjustified, and the CIT(A)'s decision was upheld.

Issue 2: Disallowance of deduction under section 80-IA
The second issue involved the disallowance of a deduction under section 80-IA due to the absence of business income. The assessee had claimed the deduction, but the Assessing Officer disallowed it as there was no business income after considering interest income from sources like loans. The Tribunal observed that since the assessee's business income turned negative after deducting other sources of income, the deduction under section 80-IA was rightfully disallowed. The Tribunal upheld the Assessing Officer's decision in this regard, emphasizing that the deduction was not applicable in the absence of business income.

In conclusion, the Tribunal dismissed the revenue's appeal and ruled in favor of the assessee, upholding the relief granted on foreign traveling expenses and the disallowance of deduction under section 80-IA.

Issues:
Appeals against orders of CIT(A) regarding levy of interest under sections 215/217 and 139(8) in orders under section 154/155.

Analysis:
1. The appeals were consolidated as they involved common issues with identical facts. The assessees contested the levy of interest under sections 215/217 and 139(8) in the orders passed under section 154/155 by the Assessing Officer.

2. The Assessing Officer initially did not charge interest under sections 139(8) or 215/217 in the assessments under section 143(1). Subsequently, interest was levied under these sections in orders under section 154/155. The assessees argued that no specific directions were given in the original orders to charge interest, making the subsequent levy unjustified.

3. The assessees further contended that interest should only be charged during regular assessments, not rectification proceedings. They cited relevant case laws to support their argument. The CIT(A) upheld the Assessing Officer's orders, stating that the interest was compensatory and automatic upon tax liability enhancement.

4. The assessees' counsel reiterated their arguments before the appellate authorities, supported by additional case laws. The Departmental Representative (D.R.) supported the lower authorities' decisions.

5. The Tribunal noted that interest was first levied in rectification proceedings, not during regular assessments as required by law. Citing a Rajasthan High Court case, the Tribunal held that interest cannot be levied if not specified in the assessment order.

6. Referring to an ITAT Chennai decision, the Tribunal emphasized that interest cannot be charged for the first time in reassessments under section 147. Sections 215(3) and 139(8)(b) allow adjustments based on subsequent proceedings but do not permit initial interest levy.

7. Based on legal precedents, the Tribunal concluded that interest should not have been charged under sections 139(8) or 215/217 in the orders under section 154/155 without prior levy during regular assessments. Consequently, the Tribunal allowed all appeals, deleting the interest charged by the Assessing Officer and upheld by the CIT(A).

The case involved a dispute over the eligibility of the assessee for exemption under Notification No. 121/92 related to auxiliary duty. The appellant claimed exemption for an item as per the notification, which was rejected initially. However, it was found that the appellant had not availed of any other specified exemptions, leading to a decision in favor of the appellant for a refund claim. The issue of unjust enrichment was also highlighted for consideration by the adjudicating authority.

The Appellate Tribunal CEGAT, Mumbai granted waiver of pre-deposit of duty and penalty for Tetmosol Soap classified under Chapter sub-heading 3401.11 as a medicated soap, not 3401.19 as claimed by the applicants, due to its use for treating skin infection "scabies" and specific usage instructions.

Issues Involved:
1. Classification of FRP sections and statues.
2. Classification and excisability of furniture.
3. Eligibility for exemption under Notification No. 76/86 as handicrafts.
4. Determination of the manufacturer.
5. Limitation and penalty.

Issue-wise Detailed Analysis:

1. Classification of FRP Sections and Statues:

The appellants argued that the film sets, settings, and statues made from FRP and PoP materials are works of art and not excisable items. They contended that these items do not have commercial identity or utility and are not traded as articles of plastic or PoP. The Commissioner classified these under Chapter 39.25 and 96.18 of the Central Excise Tariff Act, 1985, respectively. However, the Tribunal found that these items are artistic creations used for film settings and do not qualify as excisable goods. The Tribunal concluded that these items are not marketable and do not fall under the specified tariff headings.

2. Classification and Excisability of Furniture:

The Commissioner classified the furniture made at Harmony under Chapter 94.03 of the Central Excise Tariff Act, 1985, and imposed duty. The appellants argued that the furniture was handcrafted by independent contractors and not mass-produced for commercial use. The Tribunal found that items supplied to studio sets as props are not real furniture but designed for specific effects in films. These items are excluded from Chapter 94 by Chapter Note 1(k) of the Central Excise Tariff. However, certain items supplied to hotels and offices could be classified under Chapter 94.03, but their eligibility for exemption as handicrafts needs to be determined.

3. Eligibility for Exemption under Notification No. 76/86 as Handicrafts:

The appellants claimed exemption under Notification No. 76/86 for handicrafts. The Supreme Court in the case of Louis Shoppe laid down two tests for an item to qualify as handicraft: it must be predominantly made by hand and graced with visual appeal. The Tribunal found that the items made at Maya and Harmony are artistic creations and could qualify as handicrafts. The eligibility for exemption for each item needs to be re-examined based on these criteria.

4. Determination of the Manufacturer:

The Commissioner held Harmony as the manufacturer and liable for duty. The appellants argued that independent contractors were the actual manufacturers. The Tribunal found that Harmony facilitated the manufacturing process but did not directly employ the workers. The determination of the manufacturer needs to be re-examined, considering the involvement of independent contractors and the role of Harmony.

5. Limitation and Penalty:

The Commissioner imposed penalties under various sections of the Central Excise Rules and demanded duty for the extended period. The appellants argued that there was no suppression of facts as the activities were well known and not previously subjected to duty. The Tribunal found that the extended period of limitation might not be applicable, and penalties need to be reconsidered. The matter is remanded for re-determination of duty and penalties based on the findings.

Conclusion:

The Tribunal set aside the order of the Commissioner and remanded the matter for re-examination of the classification, excisability, eligibility for exemption, determination of the manufacturer, and penalties. The appeal is disposed of in these terms.

Issues:
1. Dispute over annual production capacity determination under Hot Re-Rolling Steel Mills Annual Capacity Determination Rules, 1997.
2. Disagreement on the effective date for re-determination of annual capacity.

Analysis:
1. The appellant, a company manufacturing non-alloy steel bars and rods, challenged the Commissioner's order on annual production capacity. The Commissioner, in de novo proceedings, calculated the 'd' factor as an average of 160 mm and 169 mm, fixing the Annual Capacity of Production at 164.5 mm. The appellant argued that the 'd' factor specified in the Rules is 160 mm, and the Commissioner exceeded his authority by averaging two measurements. The Tribunal agreed, stating that the 'd' factor should be 160 mm, not 164.5 mm, as per the Rules.

2. The second issue revolved around the effective date for re-determining the annual capacity. The Verification Report was dated 12-10-99, but the appellants claimed they had informed the Revenue of parameter changes effective from 1-6-99. Despite the Tribunal's earlier direction to re-fix the capacity from the actual parameter change date, the Commissioner set the date from the verification. The Tribunal ruled in favor of the appellants, emphasizing that the capacity should be re-fixed from 1-6-99, the actual parameter change date, not from the verification date.

In conclusion, the Tribunal upheld the appellant's arguments, determining the 'd' factor as 160 mm and setting the effective date for re-determining the annual capacity at 1-6-99. The impugned order was set aside, and the appeal was allowed accordingly.

Issues:
1. Interpretation of Modvat scheme for deemed credit.
2. Classification of input material as per Central Excise Tariff Act.
3. Validity of Chemical Examiner's report.
4. Application of Section 11A(1) for penalty imposition.
5. Assessment of evidence and findings by the adjudicator.
6. Justification for penalty imposition.

Analysis:

1. Interpretation of Modvat Scheme:
The appellant, engaged in manufacturing Zinc Oxide, opted for deemed Modvat credit under Rule 57G(2) of Central Excise Rules, 1944 for zinc waste and scrap. However, a discrepancy arose when the Chemical Examiner classified the sample as "Zinc ash/residues," not falling under the Modvat scheme. The appellant faced a demand of Rs. 13,05,990.00 and a penalty of Rs. 5 lakhs, leading to the appeal.

2. Classification of Input Material:
The Chemical Examiner's report played a crucial role in determining the classification of the input material. The report stated that the sample did not qualify as "Zinc Waste & Scrap" under the Central Excise Tariff Act. This discrepancy led to the denial of deemed Modvat credit, based on Rule 57-I and Section 11A, with a subsequent penalty imposition under Rule 173Q.

3. Validity of Chemical Examiner's Report:
The validity of the Chemical Examiner's report was challenged, emphasizing the need for re-testing and questioning its applicability to all past consignments. The report's classification suggestion was deemed beyond the examiner's scope, and without it, there was insufficient evidence to dispute the nature of the input material, raising doubts on the decision based solely on this report.

4. Application of Section 11A(1) for Penalty:
The imposition of penalties under Section 11A(1) was questioned, with the tribunal deeming it impermissible in this case. The absence of concrete evidence to support penalty imposition further weakened the case for penal actions.

5. Assessment of Evidence and Adjudicator's Findings:
The adjudicator's findings were scrutinized, highlighting discrepancies in the assessment of raw material rates, the validity of the Chemical Examiner's report, and the presumption regarding the use of low zinc content material. The lack of thorough investigation at the supplier's end and varying zinc content percentages in other samples raised doubts on the adjudicator's conclusions.

6. Justification for Penalty Imposition:
The tribunal found no substantial reason to uphold the penalty imposition, especially when there was uncertainty regarding the classification of input material and the validity of the Chemical Examiner's report. Consequently, the order imposing penalties was set aside, and the appeal was allowed, emphasizing the need for a more comprehensive and evidence-based assessment in such cases.

Issues Involved:
1. Classification of Sodium Azide as export waste or export rejects.
2. Compliance of Sodium Azide with stringent conditions for use in Inflatable Restraint Systems.
3. Examination of mala fide intentions and role of exonerated officer N.A. Reddy.
4. Wilful suppression of facts with intent to evade duty.
5. Marketability of the goods and Chemical Examiner's report.
6. Correctness of the assessable value for duty demand.

Issue-wise Detailed Analysis:

1. Classification of Sodium Azide:
The tribunal examined whether the Sodium Azide manufactured during trial runs should be treated as export waste or export rejects. It was concluded that the Sodium Azide, although not meeting export specifications, was not waste but export rejects. The guidelines for export rejects, as per the Ministry of Commerce and relevant circulars, were considered. The tribunal noted that the Commissioner had concluded the Sodium Azide was export rejects but failed to apply the guidelines correctly.

2. Compliance with Stringent Conditions:
The tribunal noted that the Sodium Azide produced did not meet the specifications required for use in Inflatable Restraint Systems (Air bags). The material was contaminated and contained unreacted raw materials. The Commissioner accepted that the material did not meet export specifications but concluded it was suitable for domestic use, thus falling under Chapter Heading 2850.

3. Examination of Mala Fide Intentions and Role of N.A. Reddy:
The tribunal considered whether there was any mala fide intention on the part of the directors and officers of the appellant company. It was noted that N.A. Reddy, who was responsible for Customs and Central Excise functions, had been exonerated. The tribunal found that the Commissioner did not adequately examine the role of N.A. Reddy in light of the appellants' plea that he was responsible for compliance with laws and regulations.

4. Wilful Suppression of Facts:
The tribunal examined whether there was wilful suppression of facts with an intent to evade duty. The Commissioner had relied on statements and documents indicating that the goods were removed without payment of duty and without proper accountal. However, the tribunal found that the appellants' belief that the goods were not liable for duty was not adequately considered.

5. Marketability of the Goods:
The tribunal found that the marketability of the Sodium Azide was established by the fact that it was sold to Raghu Chemicals and further sold to actual users. The Commissioner had concluded that the Sodium Azide was marketable and classified it under Chapter Heading 2850. However, the tribunal noted that the Commissioner did not obtain a Chemical Examiner's report as directed by the Hon'ble Tribunal.

6. Correctness of Assessable Value:
The tribunal examined the assessable value adopted for demanding duty. It was noted that the Commissioner had valued the goods based on the transaction value of Rs. 200/- per kg. However, the tribunal found that the duty demand should consider the selling price as cum-duty price, and an abatement should be given for the duty to arrive at the correct assessable value.

Conclusion:
The tribunal set aside the Commissioner's order, finding that the Sodium Azide should be classified as export rejects and not waste. It was concluded that no duty was payable as the goods were not part of the DTA quota and were exempt under Notification No. 125/84-C.E. The penalties imposed under various sections of the Central Excise Rules and the Customs Act were also set aside. The appeals were allowed, and the order was annulled.

Issues Involved:
1. Whether banking by Co-operative Societies requires a license under the Banking Regulation Act.
2. The registration and functioning of unlicensed urban banks.
3. The supervisory and regulatory powers of the Reserve Bank of India (RBI) over co-operative banks.

Summary:

1. Banking by Co-operative Societies and Licensing Requirements:
Co-operative Societies is a State subject and Banking a Central subject. The judgment examines whether banking by Co-operative Societies requires a license under the Banking Regulation Act. It is established that the Parliament alone has the exclusive legislative domain to make laws regulating banking business, including banking by co-operative societies. The Reserve Bank of India Act, 1934, and the Banking Regulation Act, 1949, govern the banking activities of co-operative societies. The Banking Regulation Act, 1949, was extended to co-operative societies through the Banking Laws (Application to Co-operative Societies) Act, 1965. Section 22 of the Banking Regulation Act mandates that no co-operative society shall carry on banking business unless it is a primary credit society or a co-operative bank holding a license issued by the Reserve Bank of India.

2. Registration and Functioning of Unlicensed Urban Banks:
The term "unlicensed urban banks" is introduced under Rule 15 of the Kerala Co-operative Societies Rules, 1969. The judgment clarifies that a co-operative society registered under the Kerala Co-operative Societies Act, 1969, can only carry on banking business if it is a co-operative bank with a license from the Reserve Bank of India. Primary agricultural credit societies are excluded from the Banking Regulation Act and are only permitted to provide financial accommodation to their members for agricultural purposes. The judgment also discusses the classification of societies according to their principal object and the types of credit societies under the Kerala Co-operative Societies Rules.

3. Supervisory and Regulatory Powers of the Reserve Bank of India:
The Reserve Bank of India has extensive supervisory and regulatory powers over co-operative banks as provided under sections 35A and 36 of the Banking Regulation Act. These powers include issuing directions in the public interest, ensuring proper management of banking business, and preventing detrimental conduct. The Reserve Bank of India is the guardian of banking business in India and has the authority to regulate and supervise co-operative banks. The judgment emphasizes the necessity for close coordination between the registering authority and the Reserve Bank of India to ensure compliance with banking regulations.

Conclusion:
The judgment concludes that it is the duty of the Reserve Bank of India to take prompt steps under the Banking Regulation Act to safeguard public interest, protect banking policy, and ensure proper management of banking business in co-operative banks. The Registrar of Co-operative Societies and the State Government, along with the Reserve Bank of India, are directed to take appropriate steps to address violations of statutory provisions within two months. The Original Petitions are disposed of accordingly.

The Appellate Tribunal CEGAT, New Delhi rejected the revenue's application for rectification of mistake in the Final Order dated 17-01-2002. The revenue contended that the Tribunal erred in remanding the issue without providing an effective opportunity of hearing. The Tribunal concluded that the impugned order violated principles of natural justice. The application for rectification was rejected as the Tribunal's observations were deemed correct.

Issues Involved:
Manufacture of pesticidal chemical slurry for captive use, chargeability to Central Excise duty, marketability of the product, eligibility for CENVAT Credit, SSI Exemption qualification.

Manufacture of Pesticidal Chemical Slurry for Captive Use:
The case involved the appeal against the Order-in-Original alleging manufacture of pesticidal chemical slurry by the appellant. The Assistant Commissioner confirmed the demand under Central Excise Act and imposed a penalty. The appellant contended that the slurry manufactured for captive use did not amount to the manufacture of another dutiable product. The appellant argued that the admixture of insecticides or pesticides and addition of water did not squarely fall under the provisions of Chapter Note 2 of Chapter 38 of the Schedule. The appellant emphasized that no manufacture had occurred for chargeability to duty.

Marketability of the Product:
The key issue was the marketability of the slurry. The appellant argued that for chargeability to duty, it was crucial to establish the marketability of the product. They relied on a Supreme Court decision emphasizing the twin requirements of manufacture and marketability for dutiability. The appellant contended that there was no evidence presented by the department to establish the commercial acceptability of the slurry in the market. The absence of proof regarding the commercial identity of the slurry in the market was highlighted as a significant factor in determining its dutiability.

Eligibility for CENVAT Credit and SSI Exemption:
The appellant also raised the issue of eligibility for CENVAT Credit and SSI Exemption. They claimed that even if the goods were held dutiable, they should qualify for CENVAT Credit. Additionally, the appellant sought the benefit of SSI Exemption based on the annual turnover of the item. The appellant argued that the impugned order demanding duties on the slurry and imposing a penalty should be set aside as not sustainable.

Judgment:
The Commissioner upheld the finding that the slurry manufactured by the appellant for captive use amounted to manufacture under Chapter Note 2 of the Schedule due to the addition of chemicals and inert carriers. However, the Commissioner noted that there was a lack of material evidence to establish the commercial acceptability of the slurry in the market. Citing the importance of marketability for dutiability, the Commissioner set aside the order demanding duties on the slurry. The penalty imposed was also deemed unsustainable, and the appeal was allowed in favor of the appellant.

The Appellate Tribunal CEGAT, Mumbai considered applications for waiver of pre-deposit of duty and penalties totaling Rs. 2,80,159. The Tribunal directed pre-deposit of Rs. 50,000 towards duty within four weeks, with the balance waived pending appeals. Failure to comply would result in dismissal of appeals without notice. Compliance deadline was set for 24-12-2002.

Issues:
Whether there can be two prices for the sale of a product to the same buyer for assessment under the Central Excise Act, 1944.

Analysis:
1. The appellant, engaged in manufacturing front axle assembly, supplied goods to M/s. Maruti Udyog Ltd. (MUL) for original equipment (OE) requirement at a lower price compared to spares requirement. The Revenue alleged short-levy, considering the price for spares as the normal price for excise duty assessment. A corrigendum was issued increasing the duty proposed.

2. The assessee argued that sales to MUL for OE and spares were at different commercial levels, a common trade practice in India and internationally. They contended the demand was time-barred and supported their pricing with documents. The adjudicating authority rejected these contentions, confirming the demand and imposing penalties.

3. The appellant challenged the decision, arguing that sales to MUL for OE and spares constituted different commercial levels. They cited precedents supporting multiple prices for the same buyer. The Revenue claimed there was suppression of facts justifying the extended limitation period.

4. The Tribunal noted that sales to MUL were based on different purchase orders for OE and spares, with over 90% for OE. It was questioned if two assessable values could exist for goods supplied for OE and spares. The Tribunal found no evidence of the appellant and MUL being related or additional consideration beyond invoice prices.

5. The Tribunal held that excise duty assessment should be based on the normal price for wholesale trade unless the buyer is related or price is not the sole consideration. The appellant's case on limitation was accepted, as all relevant information was provided to the department, refuting the allegation of suppression of facts.

6. Ultimately, the Tribunal ruled in favor of the appellant, setting aside the Commissioner's order. The demand was deemed unsustainable on both merit and limitation grounds, leading to the appeal's allowance. The judgment highlighted the permissibility of different prices for the same buyer based on commercial levels and the importance of considering all relevant facts in excise duty assessments.

The Appellate Tribunal CEGAT in New Delhi rejected the revenue's application for rectification of mistake in the Final Order, stating that the Tribunal did not commit an error in remanding the issue due to lack of opportunity of hearing. The revenue's contention that personal hearing was given and show cause notice was not necessary was not accepted. The application for rectification was rejected.