Mandatory to sell helmets with two-wheelers: SC

Dismissing a plea filed by the Society of Indian Automobile Manufacturers, the apex court said two-wheeler manufacturers would have to give BIS-certified helmets as ‘original equipment’

Two-wheeler makers will now have to sell a helmet along with their bikes and scooters after the Supreme Court (SC) today dismissed a plea by the Society of Indian Automobile Manufacturers (SIAM) against such a step, reports PTI.

A bench comprising Justice GS Singhvi and Justice AK Ganguly dismissed the petition filed by SIAM challenging an earlier order of the Delhi High Court.

The apex court said the manufacturers would have to give BIS certified helmets as "original equipment".

On 30 July, 2009, the high court made it mandatory for dealers to sell helmets along with new two-wheelers and said that the vehicle would not be registered by the authorities without it.

SIAM contended that the high court order would restrict the people's choice to buy their own helmet. Moreover, it would also force a person to buy a helmet again when he buys a new two-wheeler.

However, the apex court was not convinced with the argument and said, "Let there be more helmets. When you are buying a second scooter of Rs40,000, then you can buy a helmet also, which is of Rs300 only."

In its petition, SIAM had contended that by the orders of the high court, the choice of customers was curtailed, as they were forced to buy from the dealers of automobile companies and not from the open market.

The association further contended that it was against the Motor Vehicles Act, which "helmet for a person" only and not "helmet for a vehicle".

It also raised questions over the high court's direction to provide only those helmets conforming to the Bureau of Indian Standards (BIS).

"The high court made a serious error in directing that all purchasers of two-wheelers have to purchase helmet only from the dealer.

"This direction curtails the freedom of the purchaser to purchase helmet from the open market and third parties. It is also possible that in a particular case the purchaser may be buying a second vehicle and therefore may already have an existing helmet," said SIAM in its petition filed by counsels Vipin Nair and P B Suresh.


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Tyre companies demand fixed customs duty on rubber

Under the current applicable ad valorem rate of duty, when natural rubber prices move up, consumers not only have to pay more to import rubber, but also have to bear the burden of customs duty, which goes up proportionately

The Indian tyre industry has asked the government to impose customs duty on natural rubber on a fixed basis, rather than ad valorem, on account of soaring prices of the commodity, reports PTI.

Under the current applicable ad valorem rate of duty, when natural rubber (NR) prices move up, consumers not only have to pay more to import NR, but also have to bear the burden of customs duty, which goes up proportionately, Automotive Tyre Manufacturers Association (ATMA) director general Rajiv Budhraja told reporters in Kochi.

"In the event of NR prices going above a certain level, that is about Rs 90 per kg, customs duty on NR should be on a fixed basis," Mr Budhraja said.

When the NR price was Rs75 per kg, the 20% customs duty worked out to Rs15 per kg and when the price was increased to Rs180 per kg, the same rate of duty (i.e. 20%) worked out to Rs36 per kg, he said.

Such a change in tariff rates was recently introduced in China to make the domestic tyre and rubber-producing interests more competitive and viable, he said.

Currently, the import duty on sheet rubber in China is 20%, or 1.6 yuan per kg, whichever is less. Since NR prices are currently hovering at around 23.10 yuan per kg, the customs duty on rubber sheet imports is less than 7%, he said.

Mr Budhraja said the industry has also sought duty-free import of two lakh tonnes of NR on a priority basis to "cool off" rising NR prices as well as cut down the production-consumption deficit, which has been projected at 1.76 lakh tonnes in 2010 by the industry. This is much higher than the Rubber Board's estimates of a production-consumption deficit of 85,000 tonnes.

The board had said there will a 75,000 tonne increase in production, but the industry feels this is an over-estimation, given that an increase of this order has never been achieved in 20 years.

The industry has also pegged consumption growth at about 12%-15%, whereas the board's estimation is 5%-6%, he said.

NR prices have touched an all-time high of Rs180 per kg, an 80% increase over the average June, 2009, price of Rs 100 per kg. The industry feels 'let down' at the absence of corrective steps by government, Mr Budhraja said. Not even symbolic action has been taken so far by the government, he added.

Mr Budhraja and an ATMA delegation were in Kochi to parley with the government-appointed panel, headed by the Rubber Board chairman, which was formed under a recent Delhi High court order. The court had directed the commerce ministry and Rubber Board to consider representations made by petitioners on natural rubber pricing issues.

Besides ATMA, the petitioners include the Indian Cycle and Rickshaw Tyre manufacturers and All-India Rubber Industries Association.

The delegation met the board chairman in Kottayam today.

ATMA raw materials group convenor Kaushik Roy said the industry has been held "hostage" to extreme uncertainty in terms of pricing and availability of NR, causing production disruptions and putting the planning process in disarray.

"The industry is being directed by original equipment manufacturers (OEMs) and transporters for price hikes, which are inevitable, as the entire price increase in NR cannot be absorbed," he said.

Most of the NR stock in the market is fresh stock. The industry does not find any evidence of the 2 lakh tonne plus buffer stock as stated by the Rubber Board, he said.

Tyre companies have made investments of over Rs12,000 crore in capacity addition (greenfield projects and expansion), primarily in high technology radial truck and bus tyres, which would be seriously jeopardised if the present concerns over high NR prices and availability issues are not addressed and resolved on a priority basis, he said.


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