1996 (8) TMI 327 - HC - Central Excise

Court Quashes Cess Payment Demand, Rules on Textile Committee Act Application

The court held that the Textile Committee Act, 1963 applies to the petitioner and quashed the demand notices for cess payment. It ruled that the Assessing ... Cess - Textiles - Writ Jurisdiction Issues:1. Applicability of Textile Committee Act, 1963 to the petitioner2. Validity of demand notices for cess payment3. Interpretation of Rule 4 and Rule 8 of the Cess Rules4. Alternative remedy of appeal under the Textile Committee Act, 19635. Constitution of Tribunal for appealAnalysis:1. The petitioner sought a declaration that the Textile Committee Act, 1963 does not apply to them and challenged the demand notices for cess payment. The notices calculated cess based on the petitioner's failure to submit monthly returns as per Rule 4 of the Cess Rules. The petitioner argued that the Assessing Officer wrongly used the balance sheet for calculation instead of following Rule 8. The court held that Rule 8 does not allow calculation based on the balance sheet and quashed the demand notices, allowing the Assessing Officer to proceed afresh in accordance with the law.2. The respondents contended that the calculation was based on a return filed by the petitioner as per Rule 4, justifying reliance on the balance sheet. However, the court found that the petitioner had not complied with Rule 4, as indicated in the demand notices. Therefore, the court disagreed with the respondent's argument and upheld the quashing of the demand notices.3. The Union of India highlighted the option of an appeal under the Textile Committee Act, 1963. The petitioner countered that no Tribunal had been constituted under the Act, rendering the appeal remedy unavailable. The court agreed with the petitioner, overruling the preliminary objection raised by the Union of India.4. The court set aside the demand notices and allowed the Assessing Officer to proceed afresh in compliance with Rules 4 and 8 of the Cess Rules. The petitioner was instructed to provide necessary figures from the Central Excise Department for the cess assessment. If the petitioner failed to provide the figures, the Assessing Officer was directed to obtain them directly from the Central Excise Department.5. The judgment concluded by directing all parties to act on the court's order and undertook to proceed accordingly.