TaxTMI 
TaxTMI 
2013 (8) TMI 449
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....ork undertaken by them is not a process of manufacturing textile. Therefore, they are not liable to pay any cess under the Textiles Committee Act, a central legislation, being Act No.41 of 1963 (hereinafter referred to as the Act). For the Assessment Years 1997-1998 to 2000-2001 the Assessing Officer issued demand notices dated 21st of November, 2011 asking the petitioner to pay the cess amounting to Rs.2,68,293/- for the aforesaid four assessment years. The matter was carried in appeal unsuccessfully before the Textile Committee, Cess, Appellate Tribunal, Mumbai. Hence the present writ petition. The ground of challenge in the writ petition is that the activity of the petitioner is exempted from payment of cess under the proviso to section 5-A of the Act. A counter affidavit has been filed by the respondents wherein emphasis has been laid that the activity of processing and dyeing, printing, bleaching etc. on textile amounts manufacturing activity and as such the levy of cess in question is justified. Heard Sri Praveen Kumar, learned counsel for the petitioner and Sri S.K. Mishra, learned counsel for the respondents. The counsel for the petitioner submitted that under s....
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....the Textile Committee was constituted, the object and purposes of the Textiles Committee Act as also the relevant provisions of the said Act and the Rules made thereunder. The statement of objects and reasons of the said enactment is as follows:- "The Cotton Textiles Fund Ordinance, 1944, provides for the establishment of a cotton textiles fund and the Constitution of a Committee to administer the Fund. The fund was originally created from the proceeds of the levy of a duty of customs at 3 per cent on the ex-mill prices of cloth and yarn exported and later on the Central Government used to make contributions to the Fund. The Cotton Textiles Fund Committee has been doing useful work and the inspection Scheme of the Committee has found increasing popularity and authenticity in trade circles, both in India and abroad. 2. In recent years, however, conditions in the Textiles industry have changed. Indian cloth is facing ever increasing competition in the international markets from other exporting countries like Japan, China etc. The Millowner's Association and the manufacturers of textile machinery in India have been stressing necessity of an independent ....
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....replenishment entitlements under the Registered Exporter's policy. For all these services, the Committee is authorised under section 12 of the Act to levy such fees as may be prescribed by rules for the inspection and examination of textiles and textile machinery and for any other service which the committee may render to the manufacturers of textiles and textile machinery. 2. The various activities undertaken by the Textiles Committee for the development of the textile industry and the promotion of textile exports have been expanded considerably and it has been found necessary that the finances of the Textiles Committee are put on a sound footing. Moreover, if the textile industry is to develop on sound and proper lines and production and export of textiles are to be substantially increased, the expenditure of the Textiles Committee has necessarily to be on a larger scale than a present in order to be commensurate with the desired results. it has, therefore, become necessary to take steps on augment the resources of the Textiles Committee. Accordingly, it is proposed to provide for the levy of a cess as a duty of excise on all textiles (other than those manufacture....
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....f handloom or powerloom industry. Sub-s. (2) of S. 5A directs that the duty of excise levied under sub-s. (1) shall be in addition to any cess or duty leviable on textiles or textile machinery under any other law for the time being in force. In the case of the Sirsilk Limited and others (supra) the Apex Court was called upon to decide the validity of fee as levied under Rule 21 of the Rules as existed for the period prior to January 1, 1975 and the question whether imposition can be justified as fee, were in issue. It was held that all the income derived from the levy of fee under Rule 21 has to be credited to the the Textiles Fund and the said income is utilised in defraying the expenditure of the Textiles Committee in carrying its manifold activities. In para 31 of the report it has noticed that by section 5F introduced by the Act No.51 of 1973, the proceeds collected under section 5A reduced by the cost of collection as determined by the Central Government shall first be credited to the consolidated fund of India and the Central Government may, after due appropriation made by the Parliament by law pay to the Committee from out of such proceeds of money as it thinks fit for be....
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....-shimpment inspection survey of the Committee. For all these services, the Committee is authorized under section 12 of the Act to levy such fees as may be prescribed by rules for inspection and examination of the textiles and textile machinery and for any other services which the Committee may render to the manufacturers of textiles and textile machinery. It further provides that the expenditure of Textile Committee has been increased on large scale to develop the textile industry on sound and proper lines. The production and export of textiles are to be substantially increased. The Textile Committee is empowered to ensure the quality of all textiles whether made wholly or partly of cotton wool, silk, artificial fibre or silk. The Textile Committee has to carry out the work of inspection and to meet the cost of inspection etc., it has been empowered to realise the cess. The nature of proceeds so realized by the Textile Committee is quite different than the duty realised under the Central Excise Act. Both the Acts operate at different fields and have been enacted with different aims and objects. In Jagat Ram Ahuja versus The Commissioner of Gift Tax, Hyderabad, (2000) 8 SCC 249 ,....
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....(9) of the Act. Accordingly, it was found that as the petitioners were covered under section 5-A, the proviso to this section will not exempt them from the liability of cess. Neither the factual matrix nor the issue raised therein has any connection or bearing to the issues in hand. The petitioners therein were exporters and having registered exports house, were engaged in the export of ready-made garment. They challenged the levy of cess on the exporters by the Textile Committee. The levy of cess on exporters who were dealing with finished goods was held to be valid. The factual matrix in the case of Nath Brothers Exim. International Ltd. v. Union of India and Ors. (supra) being different, we fail to understand its applicability, if any, to the facts of the present case. A learned Single Judge as mentioned herein above, had an occasion to consider the judgment of Nath Brothers Exim. International Ltd. v. Union of India and Ors. (supra) and of Ujagar Printing and others (supra) and held as follows:- "The case is therefore, clearly distinguishable from the present case as in the present case the assessee has sought the benefit of the provisions of Section 5A(1) pr....