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TMI Blog2003 (3) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... exempted from payment of 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 exem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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. For the purpose of enabling the Committee to assess the amount of the duty of excise levied under sub-section (1) :- (a) the Committee, shall by notification in the Gazette of India, fix the period in respect of which assessments shall be made; and (b) every manufacturer shall furnish to the Committee a return, not later than fifteen days after the expiry of the period to which the return relates, specifying the total quantity of textiles or textile machinery manufactured by him during the said period and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 seeking to collect the textile cess. In the writ petition apart from seeking declaration to the effect that it is exempted from payment of textile cess levied under Section 5A of the Act being 100% EOU, it has also prayed for writ of mandamus directing respondent No. 3 to refund the amount of Rs. 10,73,875.93p collected from the petitioner along with interest. 10. It is clear from the sequence of these facts that the main issue which falls for determination is as to whether company like the petitioner which is 100% EOU is exempted from payment of textile cess under Section 5A of the Act. 11. The petitioner company has founded its case on the following twin submissions : 1. Vide letter dated 18-5-1994 granting permission to the petitioner to set up 100% EOU under the 100% Export Oriented Scheme for the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The State of Uttar Pradesh and others AIR 1979 SC 621. He also referred to another judgment of Single Bench of this Court in the case of Kimti Lal Rahi v. Union of India & Ors. reported as (1993) 49 D.L.T. 56. Learned Counsel for the petitioner also referred to General Exemption Notifications 125/84-C.E., and 127/84-C.E., both dated 26-5-1984 whereby Government had provided exemption to all excisable goods produced by such EOUs from payment of whole of the duty of excise as well as whole of the additional duties of excise leviable under Section 3 of the Central Excises and Salt Act, 1944. He submitted that similar provision existed in the form of Section 5E of the Act and appropriate notification could be issued for providing exemption from cess duty of Section 5A of the Act as well. 12. Mr. Rajiv Dutta, learned Senior Counsel appearing for the respondent No. 3 refuted the aforesaid contentions of the petitioner by submitting that the real character of levy under Section 5A of the Act was cess and not excise duty. His further submission was that under sub-section (5) of Section 5A of the Act the Committee was authorised to fix the period in respect of which assessment could b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould have challenged the order by filing appropriate appeal before the Tribunal. Not only that, no such appeal was filed, as per petitioner's own showing, it even continued to pay cess for further periods as well and cess was paid by covering letters dated 7-2-2001, 26-5-2001 and 1-8-2001 for the period till 30-6-2001. The petitioner company in this manner paid cess from 1-4-1999 to 30-6-2001 without challenging the assessments and/or levy of the cess. It is only when notice dated 15-2-2002 was received from respondent No. 3 whereby it was proposed to assess the petitioner company for the period from September to December, 2001 that petitioner this time rushed to the Court. The petitioner did not even make representation to the respondent No. 3 or to the Government against the proposed assessment, claim for refund of cess has to fail on this ground alone. 14. Although the petitioner has referred to Notifications issued under Central Excises and Salt Act, 1944, as per petitioner's own admission there is no exemption notification issued by the Government under Section 5A of the Act. Nothing is produced on record to show that the petitioner company had approached Government for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the real nature of the levy under Section 5A of the Act. It is imposition of cess which is prescribed. Moreover, excise duty is leviable specifically under Central Excises and Salt Act, 1944 and it is not the same excise duty which is sought to be charged all over again. That was the reason that Division Bench of the Court in the aforesaid case rejected the argument of double taxation holding that what was being charged under Section 5A of the Act was in fact a cess which had traces of fee and was not tax which is charged under Central Excises and Salt Act, 1944. From this judgment it becomes abundantly clear that under this Act, what is charged is 'fee' and not duty of excise as alleged by the petitioner. 17. Division Bench judgment of Andhra Pradesh High Court in the case entitled M/s. Sanghi Spinners India Ltd. v. Union of India & Ors. (supra) was directly concerned with this issue as is clear from the following observations made by it while dismissing the said writ petition : "On careful perusal of the above proceedings of the Government of India it seems to our mind that the Government of India has taken a policy decision not to grant exemption to the 100% export orient ..... X X X X Extracts X X X X X X X X Extracts X X X X
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