TaxTMI 
TaxTMI 
2003 (3) TMI 632
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....f excise duty and other central levies being 100% EOU. 2. The facts are in narrow compass and may be noted in the first instance. 3. The petitioner company has been set up for manufacture of cotton fabrics. It applied to the respondents 1 and 2 for grant of permission/licence to set up 100% EOU. At that time representation was made by the Government of India i.e. the respondents 1 and 2 that as per their Policy, EOU would be exempted from duties, cesses and other central levies in the nature of excise, custom duties etc. A letter of permission dated 18-5-1994 was issued by the Ministry of Industry, which inter alia stated that the petitioner company was permitted to manufacture cotton shirting, bed sheeting on conditions attached thereto. Condition Nos. 2 and 3 annexed to the letter of permission are as under : "2. Import of capital goods, raw materials and components for production under the scheme shall be exempt from custom duties in terms of customs notification in force, subject to the condition specified therein. Likewise, indigenously procured capital goods, components and raw materials required by the undertakings would also be exempt from the levy o....
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....nbsp; Provided that no such cess shall be levied on textiles manufactured from out of handloom or powerloom industry. 2. The duty of excise levied under sub-section (1) shall be in addition to any cess or duty leviable on textiles or textile machinery under any other law for the lime being in force. 3. The duty of excise levied under sub-section (1) shall be collected by the Committee, in accordance with the rules made in this behalf, from every manufacturer of textiles or textile machinery (hereinafter in this section and in Sections 5C and 5D referred to as the manufacturer). 4. The manufacturer shall pay to the Committee the amount of the duty of excise levied under sub-section (1) within one month from the date on which he receives a notice of demand therefore from the Committee. 5. &....
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....No. 3 threatened to take coercive action for recovery of Textile Committee Cess. The petitioner company responded vide letter dated 21-8-1998 reiterating that it was not liable to pay any such cess. However, respondent No. 3 replied back vide letter dated 11-9-1998 reiterating its demand. This time the petitioner company yielded to the demand of the respondent No. 3 and vide letter dated February 29, 2000 sent a cheque of Rs. 58,477/- towards payment of Textile Committee Cess for the quarter ended June, 1999. However, it is stated that payment was being made under protest. Notwithstanding this protest, petitioner company made further payments vide covering letters dated 7-2-2001, 26-5-2001 and 1-8-2001. In this manner till 30-6-2001 petitioner company deposited a sum of Rs. 10,73,875.93p towards textile cess. 8. On 15-2-2002 the respondent No. 3 sent notice to the petitioner company proposing to assess the petitioner company for the period September to December, 2001 for the purpose of textile cess. 9. This time petitioner company instead of getting it assessed or paying cess duty filed the instant writ petition challenging the action of the respondent No. 3 in seek....
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....mentioned that what was levied and collected was "a duty of excise". Therefore, according to learned Counsel for the petitioner in terms of Section 5A of the Act, textile cess was in fact a duty of excise on all textiles and all textile machinery manufactured in India and thus exempted from payment of tax. 2. Second submission was based on Principles of Promissory Estopple. It was submitted that as per the existing policy of the Government of India, 100% Export Oriented Units are exempted from payment of excise duty and other central levies. At the time the 100% Export Oriented Unit was set up by the petitioners, it was clearly represented to them that the unit being a 100% Export Oriented Unit will be exempted from all central duties and cesses in the nature of excise. Thus the question squarely raised in this writ petition is the question of promissory estoppel and the question of legitimate expectation of the petitioners qua the Export Oriented Unit. The learned Counsel in support referred to celebrated judgment of Supreme Court in the case of M/s. Motilal Padampat Sugar Mills Co. Ltd. v. The State ....
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....n this writ petition, against the petitioner. 13. This writ petition in fact deserves to be dismissed on the short ground that petitioner has failed to avail efficacious remedy of appeal provided under sub-section (7) of Section 5A of the Act. As noted above, although Petitioner Company took the stand initially that it was not liable to pay any such cess, however, thereafter by letter dated February 29, 2000, it paid cess for the quarter ending June, 1999. No doubt in this letter the petitioner company had stated that the payment was being made under protest. Fact remains that the petitioner accepted the assessment and did not challenge it by filing appeal. Merely stating that payment was made under protest could not ensure to the benefit of the petitioner company without taking consequential and necessary steps of filing appeal also. Cess was levied against the petitioner company under the provisions of Section 5A of the Act. It was by the Committee which was acting in a quasi judicial manner. Order could be challenged in appeal to the Tribunal provided specifically for this purpose. If petitioner company was of the opinion that it was not required to any cess, it should h....
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....cess levied under the Act, although credited to the consolidated fund of India and then disbursed to the Textiles Committee, but it still has the traces of fees, as was being levied prior to insertion of Section 5A in the Act and could perhaps be distinguished from a tax. We feel that the incidence of the two levies namely, under the Customs Act and under the Act are entirely different. The former being at the time of import of a particular item and the latter at the time of manufacture of textiles. There is no question of double taxation, as alleged by the petitioners. That apart, even sub-section 20 of Section 5A itself provides for levy under the Act in addition to any cess or duty which may be leviable on the same textiles or textile machinery under any other law for the time being in force. The question of want of Parliamentary competence to frame such a provision has neither been nor can be raised, particularly after the decision of the Supreme Court in the Sirsilk Ltd. v. The Textiles Committee AIR 1989 SC 317, upholding the validity of the Act." 16. Merely because words "duty of excise" are used in Section 5A of the Act would not mean that what is charge....