2008 (5) TMI 491 - AT - Indian Laws

Summary

Issues:
1. Whether the Appellant is liable to pay cess under Section 5A of the Textiles Committee Act, 1963 for manufacturing 'Narrow Woven Pile Fabrics of Hook and Loop Fastener'?
2. Whether the Demand Notice issued to the Appellant is barred by limitation?

Analysis:

Issue 1: Liability to pay cess under Section 5A of the Textiles Committee Act, 1963
The Appellant argued that they are not liable to pay cess as they are not manufacturing any textile or textile machinery. The Appellant's counsel referred to the definition of Textile under Section 2(g) of the Act, emphasizing that the material manufactured by the Appellants was a belt. However, the Tribunal found that the product, although a belt, fell within the definition of textile as any article made wholly or in part of cotton. Therefore, manufacturing this product constituted manufacturing of textile, attracting the provision of Section 5A of the Act.

Issue 2: Limitation of the Demand Notice
The Appellant contended that the Demand Notice was barred by limitation, citing Section 11A of the Central Excise Act, which sets a period of one year for issuing a show cause notice. The Appellant argued that since the cess is akin to a duty of excise, the principles of limitation under the Central Excise Act should apply. However, the Tribunal held that as no specific period of limitation was prescribed under the Act, the general limitation provisions from other Acts could not be applied. The Tribunal found no inordinate delay in issuing the Demand Notice and deemed it sustainable under law.

In conclusion, as the Tribunal found the Appellants liable to pay cess for manufacturing textile and upheld the validity of the Demand Notice, the Appeal was dismissed without costs.