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TMI Blog2022 (3) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the petitioners, the cess imposed by the State of Meghalaya by the Meghalaya Cement Cess Act, 2010 (Act No.5 of 2011) was completely illegal, without any authority and grossly prejudicial to the petitioners and others connected with the cement industry. The petitioners submit that when a tax is imposed by a State or the Union in accordance with law, a further levy may be added thereto by way of a cess, where the quantum realised by way of the cess is earmarked for a special public beneficial purpose. The petitioners refer to the education cess which is imposed on income-tax and cess charged in various other fields by way of an additional levy but which is earmarked for a special purpose and may not be subsumed as a part of the general ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned Act was enacted, read thus: "84. Duties of excise on the following goods manufactured or produced in India, namely:- a) Petrol crude; b) High speed diesel; c) Motor spirit (commonly known as petrol); d) Natural gas; e) Aviation turbine fuel; and f) Tobacco and tobacco products." 7. It is evident that since cement was not included as one of the excepted products in Entry 84 of List I, no impost could have been levied by any State on the manufacture of cement notwithstanding such process of manufacture being within the geographical limits of the State. And, for the same reason that the State had no authority to impose any tax or the like on the manufacture of cement in the State, it did not possess any authority to le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not imply that the levy would be on the sale or transfer. The expression "sale or transfer" governs the word "remove" - or, more precisely, the action of removing or transporting or attempting to remove or transport - used earlier in the same provision. At any rate, just like a river cannot rise above its source, Section 6 and the manner of collection of levy cannot override the charging section which imposes the tax on the manufacturers and producers of cement in the State. 9. In plain words, the State had no authority to impose any tax or cess on the manufacture or production of cement, whether by the said Act or by any other disingenuous device; and, in all fairness, no further attempt is made on behalf of the State to justify th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court. 12. There is no doubt that there is no available mechanism to assess the quantum of the levy that may have been passed on to the customer or may have been absorbed by the manufacturers. It is possible that a part of it had been passed on and a part absorbed by reducing the profit element. It is equally possible that the entirety of the impost had been passed on to the customers. Yet, it has to be taken into account that notwithstanding the product in the present case being cement, which is indispensable in certain cases, any additional levy on the price of a product reduces the quantum of sale or manufacture in the usual course. In such sense, the manufacturers and producers of cement in the State may have taken a hit as a direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l have to be earmarked by the State for purchasing advanced medical equipment at the additional cancer wing which has been set up in the Government General Hospital in Shillong. It is made clear that the ad hoc amount of 30 percent will be over and above what the State is otherwise obliged to spend on the additional cancer wing and any grant that the State may be entitled to obtain from the Union in such regard. A copy of the relevant affidavit shall also be forwarded to the office of the Accountant-General, along with a copy of this order, for verification. 15 Accordingly, WP (C) Nos.280 and 281 of 2016 are disposed of by holding that the State had no authority to impose cess in terms of the impugned Act of 2010 and by annulling the Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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