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[No.88]                                                                            June 10, 2004

International

CBDT

CBEC Excise Tariff

CBEC Customs Tariff

Department of Economic Affairs

RBI

Supreme Court

High Courts and Tribunal

 

 

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International Legal News

Cases

Source: Westlawinternational.com

§         Civil Rights: Prison's policy against obscene publications was unconstitutional.

A West Virginia prison's policy prohibiting inmates from receiving or possessing obscene materials, which had been applied to purge nearly 21% of the prison's library, was found to be unconstitutional and ordered to be amended, because the policy was not reasonably related to a legitimate penological interest. The policy was irrational since it banned materials containing even one depiction of sexual intercourse regardless of any literary value they might have, and had been interpreted to ban such books as Sophie's Choice and works by John Updike, while allowing certain commercial pornography such as Playboy magazine.

Cline v. Fox

§         Insurance: A property insurer could not bring a subrogation claim against the tenant.

Absent an express agreement to the contrary in a lease, a tenant and landlord are implied coinsureds under the landlord's fire insurance policy, and the landlord's liability insurer is precluded from bringing a subrogation action against the negligent tenant. In this case, the lease did not contain such an express agreement and the subrogation claim was not allowed.

Tri-Par Investments, L.L.C. v. Sousa

§         Criminal Justice: Photographic lineup showed to witnesses was not impermissibly suggestive in murder prosecution.

The photographic lineup that police showed to witnesses in a murder prosecution was not impermissibly suggestive. Although defendant's skin color was the darkest among the six men in the photographs, the photographs clearly indicated that they were taken in different lighting conditions, the men in the photo array were similar enough to defendant in various aspects that defendant's photograph did not stand out in a fashion that suggested he was the person suspected by the police, and defense counsel clearly presented the issues of accuracy of the witnesses' identification to the jury.

People v. Shabazz

§         Criminal Justice: District of Columbia's Sex Offender Registration Act did not violate substantive due process.

The District of Columbia's Sex Offender Registration Act did not violate principles of substantive due process. The Act did not infringe any fundamental rights or liberty interests of persons who committed sex offenses before it was enacted or who were acquitted of sex offenses by reason of insanity, even though the requirements of registration, verification, and updating imposed a burden and may have been irksome. Further, the Act was rationally related to a legitimate governmental goal of protecting the community from recidivist sexual offender.

In re W.M.

§         Family Law: Statute prohibiting partial-birth abortions lacked required exception for mother's health.

A federal district court ruled that the Partial-Birth Abortion Ban Act of 2003, which banned the use of the intact D & E abortion procedure, was unconstitutional because it posed an undue burden on a woman's right to choose an abortion prior to viability of the fetus, failed to clearly define the prohibited medical procedures, and lacked the required exception for the health of the mother. Ambiguity in some terms used in the Act deprived physicians of fair notice as to what actions were prohibited, and there was significant medical authority to support the proposition that in some circumstances intact D & E was the safest procedure for mothers.

Planned Parenthood Federation of America v. Ashcroft

§         Government: Inmate's allegations of transfer based upon inaccurate records stated cause of action under Privacy Act.

The Eleventh Circuit adopted the Ninth Circuit's formulation for stating a claim under the Privacy Act. Under that formulation, the allegations of an inmate's complaint, that the Bureau of Prisons (BOP) willfully and intentionally transferred him pursuant to inaccurate prison records, and thus abridged his First Amendment right to petition, stated a cause of action. The Eleventh Circuit noted that the Tenth and District of Columbia Circuits have also followed the Ninth Circuit's formulation, but the Sixth Circuit has not.

Perry v. Bureau Of Prisons

§         Immigration: Under transitional IIRIRA rules, voluntary departure time was stayed by filing petition for review.

In cases governed by the transitional rules of the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA), the time allotted by the Board of Immigration Appeals (BIA) for an alien to voluntarily depart from the United States does not begin to run until the Court of Appeals' final disposition of the alien's petition for review of the removal decision. If the voluntary departure period were not stayed in such a situation, the alien would face a Hobson's choice of either forfeiting the rights conditioned upon timely departure by remaining in the United States to pursue a petition for review, or forfeiting the right to petition for review by leaving the country in a timely manner. Requiring such a choice was unacceptable.

Elian v. Ashcroft

§         Torts: Primary assumption of risk doctrine precluded negligence action based on use of personal watercraft.

The doctrine of primary assumption of risk applied in a negligence action arising from injuries sustained from the use of a Sea-Doo personal watercraft, notwithstanding legislation pertaining to the regulation and use of personal watercraft. Such statutory provisions did not abrogate, supersede, or displace the primary assumption of risk doctrine in the absence of an explicit and unambiguous intent on the part of the legislative authority to do so.

Peart v. Ferro

§         Criminal Justice: Billion dollar bail was unconstitutionally excessive.

Bail amounts set at one billion dollars as to each of three charges against a petitioner, who sought writs of habeas corpus, were unconstitutionally excessive, even though the petitioner's past history demonstrated a clear flight risk, and the petitioner's family possessed tremendous wealth. The offenses involved were non-violent offenses of jumping bail, failing to appear, and tampering with evidence. Conditions imposed in each bond order, that included the requirement that the petitioner appear in court each week, and that the petitioner be kept, at his own expense, under 24 hour supervision by a licensed peace officer of the state, addressed any flight risk.

Ex parte Durst

§         Real Property: Intervening conveyance was not required for wife to convey property to herself and husband as joint tenants with right of survivorship.

A wife was not required to use a straw man or intervening conveyance in order to convey her fee simple interest in property to herself and her husband as joint tenants with right of survivorship. Therefore the property passed to the husband in fee simple when the wife died. Even if the conveyance created a tenancy in common, the trial court was obligated to construe the deed to create a joint tenancy with right of survivorship in light of wife's express intent that the property pass in fee simple to the survivor.

Estate of Sherman ex rel. Maddock v. Estate of Sherman ex rel. Snodgrass

§         Copyrights: State prisoner did not own copyright in his automobile license plate design.

A state prisoner who created the design for an automobile license plate while working in the prison print shop could not claim a copyright interest in the design. The prisoner was a state employee, and his creation of the design was within the scope of his employment. Thus, under the work-for-hire doctrine, any copyright in the design was owned by the state.

McKenna v. Lee

§         Energy and Utilities: Award of liquidated damages under Wiretap Act is discretionary.

Addressing an issue of first impression, the Eleventh Circuit has ruled that an award of liquidated damages under the Wiretap Act for intercepting electronic communications is discretionary. The court disagreed with a decision of the Seventh Circuit, which ruled that such an award was mandatory. The Court upheld a district court's decision not to award liquidated damages to a satellite television broadcaster in its action against an individual who used a pirate access device to intercept the broadcaster's programming for private viewing at his home.

DIRECTV, Inc. v. Brown

§         Family Law: Parol evidence was admissible to define "cohabit."

The property settlement agreement in a divorce action, stating that alimony payments to the wife would end, after a minimum period, if the wife were to "cohabitate," was ambiguous as to whether it referred to or included the wife living with a person of the same sex, and thus, parol evidence was admissible. "Cohabitate" was not defined in the agreement, nor was there an incorporation of a definition from an outside source, such as the Divorce Code, which defined cohabitation in terms of people of opposite sexes living together. "Cohabitate," as used in the agreement, was not followed with any language that clarified the specific person or persons with whom the wife could or could not cohabit for purposes of continuing to receive alimony payments. In common usage, as various dictionaries reflected, "cohabit" had several definitions and was not necessarily limited to that which occurred between a man and a woman.

Kripp v. Kripp

§         Government: Legislature could not authorize games in which chance predominated outcome of game.

The Alabama constitution prohibited the Legislature from authorizing lotteries or gift enterprises that involved games or devices in which chance predominated the outcome of the game, even if some skill was involved. In addition, the statute exempting bona fide coin-operated amusement machines (COMs) from criminal gambling statutes could not be construed so as to legalize games or activities in which skill did not predominate over chance in determining the outcome, as such construction would contravene the state's constitutional ban on lotteries.

Ex parte Ted's Game Enterprises

News

§         Benin Judges To Go On Strike Over 'Meddling'

Benin judges have decided to go on a three day strike to force the closure of all courts and tribunals and paralyzing the justice ministry. The strike is the second in less than a month. The judges have accused the Benin government of interfering frequently in judicial matters.

§         Zimbabwe To Go For Nationalisation Of All Land

Zimbabwe plans to end private ownership of land by replacing all title deeds with 99-year leases. All land-owners in that case would be required to go to the government to be "vetted" to get a lease. The move is to aim at resettling all land as state property which will now onwards enable the utilisation of the land for national prosperity. It is important to note that private ownership of land is not allowed in many African countries.

§         TV Miracle Ban Divides Nigerians

Nigeria remains deeply divided over a ban imposed last month on television stations showing so-called "miracles". This happened as a result of an edict from Nigeria's National Broadcasting Commission, which took effect from the beginning of May. The NBC, the body which regulates broadcasting, says some of the miracles shown on television are false and stations can broadcast miracles only when they are verifiable. But this move has strongly been resisted by the members of the Christ Embassy, one of the largest churches which used to show healing services and have now gone to court to challenge the NBC.

§         Doping Probe For US Duo

American Sprinters Montgomery and Gaines, accused of doping violations, have both received letters from the US Anti Doping Agency, USADA. The charges relate to the investigation into the Balco laboratory, which has been linked with new steroid THG.

§         Chile Declines To Hand Over Argentine President, Menem

A Chilean court has rejected the second of two extradition requests for former Argentine President Carlos Menem. Mr Menem has been living with his family in Chile. Judge Jaime Rodriguez Espoz said he could not agree to the request, as Mr Menem was not on trial in Argentina and had no previous conviction there. The Argentina authorities want to question the 73-year-old in cases of alleged fraud and illegal enrichment.

§         Blackberry Battle Enters The Court

The Blackberry, one of the hottest gadgets in recent years and which has become the gadget to be seen with is to be faced with a court case that is beginning in Washington. The case will decide the fate of the Blackberry. The issue is the US patent for the Blackberry, a handheld phone and e-mail device which has become ubiquitous among the corporate elite. Research in Motion, the Canadian firm that makes the Blackberry, is appealing against an injunction that effectively bars it from the key US market. The injunction was won in 2003 by NTP, a firm owned by engineer John Campana. Mr Campana, who owns 50 patents through NTP, claims Research in Motion violated some of the patents he owns governing wireless text communication.

§         China Starts The Multi-Billion Dollar Fraud Trial

In Southern China, on the island of Hainan, the trial has begun of 25 people accused of carrying out a $3.15bn fraud which is said to be one of the largest embezzlement cases since the communists took power in China in 1949. The amounts of money allegedly involved in this case are large even by China's dizzying standards.

§         EU All Set For Biggest-Ever Election

Citizens in 25 EU member states are set to elect representatives to the body's parliament, as the world's biggest trans-national polls start. Issues set to dominate the polls include the war in Iraq and the degree of European control over local affairs. The first countries to go to the polls will be the Netherlands and Britain; turn-out is not expected to be high in either nation.

§         Germany Sentences Torture Pupils

A court in Germany has sentenced three students, aged between 16 and 18, to prison sentences of up to a year and a half for abusing a classmate. The case sent shockwaves through Germany. The teenagers were found guilty of repeatedly beating and sexually humiliating their victim at a special school in the town of Hildesheim. The case has caused much angst about the state of Germany's schools.

§         Qatar Launches First Constitution

The Gulf state of Qatar has issued its first written constitution, introducing a partially-elected legislative body. The constitution will come into force in 2005. It keeps ultimate power in the hands of the emir but provides for a two-third elected advisory body. The constitution - which received overwhelming support in a referendum last year - guarantees freedom of expression, assembly, and religion.

CBDT

§         Institution of Engineers (India), Calcutta Approved as Institution u/s. 35(1)(ii)

Notification No 151/2004 Dated 24.05.2004: The Institution of Engineers (India), Calcutta has been approved as an Institution by the Central Government for the purpose of clause (ii) of sub-section (1) of Section 35 of the Income tax Act, 1961, read with Rule 6 of the Income tax Rules, 1962 subject to the conditions that the organization shall maintain separate books of accounts for its research activities and that it shall furnish the Annual Return of its scientific research activities to the Secretary, Department of Scientific & Industrial Research, 'Technology Bhawan', New Mehrauli Road, New Delhi-110016 for every financial year on or before 31st May of each year;

CBEC Excise Tariff

§         Electronic filing of Central Excise Returns

Circular No: 791/24/2004-cx Dated 01.06.2004: The Central Board of Excise and Customs in continuation of its efforts for-trade-facilitation, proposes to provide the facility of filing the monthly/quarterly excise returns, namely, ER-1, ER-2, ER3 under Central Excise Rules and dealers return prescribed under sub-rule (6) of rule 7 of the CENVAT Credit Rules, 2002 electronically to all manufacturers of excisable goods, EOUs and registered dealers. This facility of e-filing of excise returns will be available with effect from 30-06-2004. The facility to file excise returns electronically is optional. All assessees and registered dealers who have been allotted 15-digit Excise Control Code (ECC) are entitled to avail the facility of e-filing. The circular also sets out the guidelines for the filing of the same.

CBEC Customs Tariff

§         Concessional Rate of Duty on Import of Gold and Silver

Circular No. 40/2004 Dated 04.06.2004: The Central Govt vide Notification No. 62/2004-Cus dated 12.5.2004 has allowed import of certain gold and silver items at concessional rates to all importers with the exception of import of gold or silver through post, courier or baggage. By virtue of Circular No. 40/2004 Dated 04.06.2004 the Govt clarifies that "gold in any form" or "silver in any form", will cover all items of gold & silver falling under Ch.71 except gold/silver jewellery or foreign currency coins of gold/silver. Thus, it would cover, for example, findings and mountings of gold, house-hold articles of gold/silver so long as they are classified under Chapter 71 and the gold need not be of 24 carats.

§         Levy of National Calamity Contingent duty under the Finance Act, 2003

Circular No 41/2004 Dated 07.06.2004: The CBEC Customs Department clarifies that National Calamity Contingent Duty (NCCD) is charged under Section 136 of the Finance Act, 2003 on specified goods manufactured in India. In respect of imported goods this duty is recovered as CVD. However, as per Section 134 of the Finance Act 2003, specified imported goods (including Polyester Texturised Yarn - PTY) are chargeable to NCCD twice - one as CVD under section 136 of the Finance Act 2003 and again as Customs duty under Section 134 of the Finance Act 2003. Vide Notification No. 77/2003-Cus Dated 14.5.2003, NCCD collected as CVD has only been exempted in respect of imported specified goods. There is no exemption in respect of NCCD, payable as Customs duty on imported goods under Section 134 of the Finance Act 2003.

Department of Economic Affairs

§         Sale (Re-issue) of '6.01 per cent Government Stock, 2028'

Notification No: 4 (8)-W&M/2004 (i) Dated 28.05.2004: The Government of India by virtue of the above notification issued by the Department of Economic Affairs notifies sale of '6.01 per cent Government Stock, 2028' for an aggregate amount of Rs. 4,000 crore subject to certain terms and conditions mentioned in the above notification. It stipulates that the Government Stock will be sold through Reserve Bank of India, Mumbai Office by a price based auction using multiple price auction method and that the auction will be conducted by Reserve Bank of India, Mumbai Office, Fort, Mumbai-400 001 on June 3, 2004. It also states that the Government Stock up to 5 % of the notified amount of the sale will be allotted to eligible individuals and institutions as per the enclosed Scheme for Non-competitive Bidding Facility in the Auctions of Government Securities.

RBI

§         Income Recognition, Asset Classification and Provisioning Norms

Circular No: UBD.No.PCB. 49 /12.05.03/2003.04 Dated 01.06.2004: Advises all the urban co-operative banks to take necessary steps to ensure that the non performing assets are identified on an ongoing basis and that the classification is completed in any case within one month of the account becoming NPA. The aforesaid requirement presupposes that adequate provision is also made on an ongoing basis, as the net non performing assets arrived at otherwise would be showing a distorted/inaccurate picture. It is therefore clarified that the required provisions for NPAs should be made at quarterly intervals as at the end of June, September, December and March so that the income and expenditure account for the respective quarters as well as the profit & loss account and balance sheet for the year end would reflect the provision made for the non performing assets.

§         Declaration of Dividend by Primary Dealers

Circular No. IDMD.PDRS.No 6 /03.64.00/2003-04 Dated 01.06.2004.: The Reserve Bank has been advising the Primary Dealers (PDs) from time to time to formulate a prudent dividend policy so as to build up sufficient reserves as a cushion against adverse price movements. The matter has been reviewed in consultation with the Standing Technical Advisory Committee on Financial Regulation (STACFR) and vide Circular No. IDMD.PDRS.No 6 /03.64.00/2003-04 Dated 01.06.2004 the RBI makes it known that it has decided to adopt a regulatory approach for declaration of dividend with focus on the 'dividend payout ratio'.

§         Line of Credit for USD 10 million by Exim Bank to Bank TuranAlem, Kazakhstan

Circular No: A.P.(DIR Series) Circular No. 94 Dated 09.06.2004: The RBI vide A.P. (DIR Series) Circular No.84 dated April 16, 2004 (RBI/2004/148) sanctioned Line of Credit (LOC) for USD 10 million extended by Exim Bank to Bank TuranAlem, Kazakhstan. The RBI vide A.P.(DIR Series) Circular No. 94 Dated 09.06.2004 advises that the LOC is available for exports from India to all the twelve CIS (Commonwealth of Independent States) countries including Kazakhstan, viz. Russia, Azerbaijan, Uzbekistan, Turkmenistan, Kyrgyzstan, Kazakhstan, Belarus, Ukraine, Tajikistan, Georgia, Moldova and Armenia.

§         Exchange Earners' Foreign Currency (EEFC) Account Scheme

A.P.(DIR Series) Circular No. 94 Dated 07.06.2004: Vide A.P.(DIR Series) Circulars Nos.78 dated February 14, 2003 and 104 dated May 31, 2003 exporters have been permitted to grant trade related loans / advances from their EEFC Account to their overseas importer customer without any ceiling, subject to compliance with terms of sub-regulation (4) of regulation 5 of Notification No.FEMA 3/2000-RB dated May 3, 2000, viz. Foreign Exchange Management Act (Borrowing or Lending in Foreign Exchange) Regulations,2000 by the RBI. Further, where the amount of loan exceeds USD 25,000 a guarantee of a bank of international repute situated outside India is required to be provided by the overseas borrower in favour of the lender.

2. As a measure of further liberalisation, vide A.P.(DIR Series) Circular No. 94 Dated 07.06.2004 the above limit is increased to USD 1,00,000 from USD 25,000. Accordingly, overseas borrower would need to provide guarantee of a bank of international repute situated outside India in favour of the lender where the amount of trade related loan / advance by exporter out of his EEFC Account exceeds USD 1,00,000.

 

Supreme Court

§         Commissioner of Income Tax Vs. P.V.A.L. Kulandagan Chettiar (dead) through L.Rs.

In the appeal, the following two questions attracted the attention of the Hon’ble Supreme Court:

(a) Whether the Malaysian income cannot be subjected to tax in India in the basis of the agreement of avoidance of double taxation entered into between Government of India and Government of Malaysia ?

(b) Whether the capital gains should be taxable only in the country in which the assets are situated?

The Court while dismissing the appeal held that tax liability arising in respect of a person residing in both the contracting State has to be determined with reference to his close personal and economic relations with one or the other. In the instant case, the Court held that business income out of rubber plantations could not be taxed in India because of closer economic relations between the assessee and Malaysia in which the property was located and that where the permanent establishment has been set up would determine the fiscal domicile. Further, reading the Treaty in question as a whole, if the individual was deemed to be a resident of a contracting State where his personal and economic relations are closer, then his residence in India would become irrelevant.

It was also held that for purposes of the Income Tax Act, capital gains is always treated as income arising out of immovable property though subject to different kind of treatment. Therefore, the contention that it was not a part of the Treaty was not held to be acceptable.

High Courts and Tribunal

Delhi

§         B.K. Kalra Vs. Punjab National Bank

A charge-sheet was issued against the petitioner, a bank employee for engaging himself in business of stocks and shares and also indulged in heavy speculative transactions through various share brokers which was outside the scope of his duties. Petitioner challenged the first charge-sheet on the ground that it was vague indefinite and lacks material particulars and court stayed further proceedings. Respondent proceeded to remove the defect by providing to the petitioner the details of the allegations against him. Petitioner contended that it was a case of de novo enquiry and no one could be vexed twice on the same cause of action, rule against double jeopardy was attracted, requiring the charge-sheet to be quashed.

The Court held that it was permissible to hold a fresh enquiry on the same charge-sheet after removing the defect which had vitiated the earlier enquiry. Grievance of the petitioner being that the charge-sheet issued to him was vague and this prejudiced him, petitioner would have no grievance if the respondent furnished him the particulars of the imputations constituting the charge against the petitioner. The court further held that rectification of defect in the framing of a charge and holding of a de novo enquiry was permitted.

Bombay

§         Shri Dattu Rama Sawant Vs. Bharat Textile Mills N.T.C. (S.M.) Ltd.

This Petition challenged the order of the Industrial Court passed in a Revision Application setting aside the order of the Labour Court granting the Petitioner wages for the period of three years.

The court held that Labour Court correctly found entitlement of petitioner to continue in service upto the age of 63 years in accordance with standing order 20(A) of the Standing Orders applicable to the mill workers and as per the records maintained by the Respondent. Court further held that the workers would continue in his service till the end of the year when they attained superannuation.

(CESTAT) Delhi

§         Mahavir Generics Vs. CCE

This appeal at the instance of the assessee challenged the order passed by Commissioner of Central Excise (Appeals) in the matter of liability to pay service tax. Appellants who were working as a consignment agent, got themselves registered with the Central Excise authorities and started paying service tax on the commission received by them. Later on they realized and contended that the services rendered by them would not amount to a taxable service as one rendered by a Clearing and Forwarding agent.

The CESTAT held that Products of the principal were supplied to the appellant on consignment basis and the appellant sold the products to the customers. Such an activity would not come within the service provided to a client by clearing and forwarding agent in relation to clearing and forwarding operation. CESTAT further held that merely because the appellant had once got registered as a clearing and Forwarding agent for the purpose of Service Tax under a misunderstanding of the correct legal position they could not be compelled to continue such registration if they under law were not liable.

 

 

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