No further cess on jute bags made from duty-paid jute fabrics when both fall under the same tariff entry.

Cess duty was not leviable on jute bags manufactured from duty-paid jute fabrics where both products fell under the same tariff entry. The conversion of the fabrics into bags was treated as not amounting to manufacture for cess purposes, because the input had already suffered cess and the statutory scheme did not warrant a further levy on the same commodity chain. The assessee's position was therefore upheld.

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Issues: Whether cess duty was leviable on jute bags manufactured from duty-paid jute fabrics when both fell under the same tariff entry.

Analysis: The admitted position was that jute fabrics had already suffered cess. The conversion of jute fabrics into jute bags did not amount to manufacture for the purposes of the cess statute, since both articles fell under the same tariff entry. In that situation, further levy of cess on the bags would amount to levy on the same commodity chain and was not warranted under the statutory scheme.

Conclusion: Cess duty was not leviable on the jute bags in the facts of the case, and the finding in favour of the assessee was upheld.

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