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TMI Blog1997 (4) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... e also holds out a warning that if any manufacturer fails to pay the duty of excise levied within the period specified, the duty payable by the manufacturer shall be recoverable as an arrear of land revenue through the District Collector concerned as contemplated under Section 5D of the Act. (3) The petitioners primarily impugn the levy of cess on the exporters and seek consequential relief by way of an appropriate writ quashing the said public notice and further a writ in the nature of mandamus commanding the respondents to permit them to export their consignments of readymade silk garments without imposition of cess as envisaged in the public notice. (4) The 1st petitioner is an incorporated company and. claims to be a registered export house engaged in the export of readymade garments, including of silk. The second petitioner is the Managing Director and share-holder of the petitioner Company. The Textiles Committee, the main contesting party is respondent No. 2. The other respondents No. 1,3 and 5 respectively are, the Union of India, through Secretary, Ministry of Textiles (administrative controlling exports of textile garments) Central Silk Board (incorporated under the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial silk or other-fiber only on a powerloom or a handloom, and the petitioner, has-fialed to demonstrate that the garments exported by it are manufactured from out of handloom tor powerloom industry. Alterrurtively, assuming that the raw material for the garments in question are the textiles procured by the petitioner from handloom and powerloom indltetl'y, the said garments will not be exempt from levy of cess under proviso to Section 5A(1) because the finished garments cannot be said to be. the textiles manufactured from put of the handloom and powerloom industry; (II)The levy of cess under the Act, and the Customs Act being independent and different from each other in nature arid incidence, there' is no question of any double taxation; and (III)Though an exporter simplicitor, exporting textiles and/or textile machinery which are not produced or manufactured either by himself or with the help and assistance of the hired labour or any third party may not fall within the ambit of the Act, an exporter, like the petitioner, who brings into existence or makes or fabricates a textile by his own labour or through an independent contractor or through the instrumentality of an ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment and Section 4 deals with its functions; stated generally, are to assure standard qualities of textiles both for internal marketing and export purposes and the manufacture and use of standard type of textile machinery. Section 7 of the Act, provides for constitution of a fund called the Textiles Fund. Funds recovered under the Act form part of this fund and the monies in the fund are applied for meeting the pay and allowances of the officers and other employees of the Committee and to meet its other administrative expenses for carrying out the purposes of the Act. Section 12 empowers the Committee to levy fee and also provides for recovery of any sum payable to the Committee under the section as arrears of land revenue. Section 5A, inserted by Act No. 51 of 1973 w.e.f. I January 1975, which is the charging section and all important for the purpose of the instant case reads as follows: "5A(1).There shall be levied and collected as aces for the purpose? of this Act, a duty of excise on all textiles and on all textile machinery manufactured in India at such rate, not exceeding one per cent ad valorem as the Central Government may, by notification in the Official Gazette, fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of excise has been imposed. Sub-section (1) provides that there shall be levied and collected as a cess for the purposes of the Act a duty of excise on all textiles and on all textiles machinery manufactured in India at such rate, not exceeding 1% ad valorem, as the Central Government may by notification in the Official Gazette fix. Proviso thereto, heavily relied upon by the petitioners, interdicts that no such cess shall be levied on textiles manufactured from out of handloom or powerloom industries. Sub-section (2) of Section 5A directs that the duty on 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 time being in force. Sub-sections (3) to (6) prescribe the procedure for assessment and recovery of the duty of excise payable by a manufacturer. Sub-section (7) provides for remedy against the assessment made by the Textiles Committee. (13) Another change brought about by the Act 51 of 1973, having bearing on the present case, was the deletion of Clause (b) of Section 12 and Clause (e), and replacing it by a re-lettered Clause (b) with a proviso and insertion of the word "speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proviso cannot be torn apart from the main enactment nor can it be used to nullify by implication what the enactment clearly says nor set at naught the real object of the main enactment unless the words of the proviso are such that it is its necessary effect. The same view was again reiterated by the Supreme Court in a later judgment in Kerala State Housing Board v. M/s. Ramapriya Hotels (P) Ltd., . (17) In our view the words in the proviso, from out of cannot be looked at in isolation but they have to be contextually construed. The important word in the proviso is "manufacture", preceding from out of handloom or powerloom industry. This clearly signifies that the "manufactured textiles" fur being eligible for exemption must itself, in the finished form, come out from the handloom or powerloom industry and not processed further from it. To put it differently, a bare reading of the proviso makes it evident that the cess under the Act is not to be levied only on that particular "textiles" which by itself is manufactured by that handloom and powerloom industry which falls within the ambit of clauses (ca) and (da) of Section 2 of the Act and not on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the third and the last ground that exporters cannot be brought within the purview of the Act, it would be necessary to again have a look at the charging Section 5A of the Act. From a bare reading of the said section it is evident that the incidence of levy of cess is on the "manufacture" of textiles and textile machinery. Who "manufactures" the textiles or textile machinery is immattrial. Therefore, the question which arises for consideration is whether the petitioner, who claims himself to be a mere exporter can be said to be "manufacturer" of textiles/garments which he is exporting ? Assuming that he is not manufacturing any textiles himself, though the plea in the counter-affidavit that the petitioner is registered with the Textile Committee as a manufacturer-cum-exporter of readymade garments is not countered. The expressions "manufacture" or "manufacturer" are not defined in the Act. We may, therefore, look for their definition in some other statute. Under the Central Excise and Salt Act, 1944, the word 'manufacture' has been defined as follows : "2(F)."manufacture" includes any process : (i) inciden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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