Statutory definition controls cess liability: handloom cess could not be levied on HDPE fabrics outside the defined term "cloth".

Handloom cess under the Khadi and Other Handloom Industries Development (AED on cloth) Act, 1953 was held not leviable on coated or laminated HDPE fabrics because the statutory definition of "cloth" in section 2(b) covered only cotton, woollen, silk and rayon or artificial silk fabrics in the First Schedule to the Central Excises and Salt Act, 1944. As HDPE fabrics were outside that defined class, the levy could not be sustained and the demand for additional duty by way of handloom cess was set aside. Questions on exemption and limitation were treated as unnecessary once the goods were found to fall outside the charging definition.

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Issues: Whether handloom cess was leviable on coated/laminated HDPE fabrics under the Khadi and Other Handloom Industries Development (AED on cloth) Act, 1953.

Analysis: The operative definition of "cloth" in Section 2(b) was held to cover only cotton, woollen, silk and rayon or artificial silk fabrics as defined in the First Schedule to the Central Excises and Salt Act, 1944. HDPE fabrics were not included in that definition. Since the statutory definition did not embrace HDPE fabrics, the question of levy of handloom cess on laminated or otherwise processed HDPE fabrics did not arise. In that view, the remaining objections, including the exemption and limitation contentions, were treated as unnecessary for decision.

Conclusion: Handloom cess was not chargeable on HDPE fabrics, and the appeal succeeded in favour of the assessee.

Final Conclusion: The demand for additional duty by way of handloom cess was set aside because the goods in question did not fall within the statutory definition on which the levy depended.

Ratio Decidendi: A cess can be levied only on goods that fall within the charging statute's defined commodity; where the defined term does not include the goods, no levy can be sustained.

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