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TMI Blog1987 (8) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... d remanded the matter for fresh consideration in the light of the decision of the Supreme Court in Ahmedabad Manufacturing and Calica Printing Co. Ltd. (CALICO MILLS), AHMEDABAD - 1985 (21) E.L.T. 633 = 1985 (3) S.C.C. 693. 2. The petitioners challenged the levy of cess on jute yarn produced in the process of producing jute products. The cess is levied under Section 9(1) of the Industries (Development and Regulation) Act, 1951 which provides for levy and collection of cess on all goods manufactured or produced in scheduled industries as may be specified by the Central Government by an order. The proviso thereto restricts the rate of cess to 13 ps. per cent of the value of the goods. In exercise of the powers conferred under Section 9(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Development Council under Section 6 of that Act and the amount has to be utilised for promotion of scientific and industrial research and though jute yarn is an intermediary product, the cess can be levied. The Division Bench referred to levy on intermediary products held that the principles with regard to levy of excise duty under the Central Excise Act cannot be applied to the levy of cess under Section 9 of the Industries (Development and Regulation) Act. It is further held that jute yarn is known in the commercial parlance and it is article which can be sold by itself. 3. In 1985 (21) E.L.T. 633 = 1985 (3) S.C.C. 693 (2 supra) the Supreme Court in the context of considering whether Calikut Special containing 46% of artificial silk at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt contended that in view of amendment of Rules 9 and 49 of the Excise Rules with retrospective effect from 28-2-1944 the intermediary products are dutiable under the Excise Act also and even otherwise the considerations for excise levy cannot be imported for the purpose of levy of cess. 5. Rules 9 and 49 of the Central Excise Rules before amendment prohibit the removal of manufactured goods from the place of manufacture and permit the postponement of levy of duty on intermediate goods till they are removed from the premises of the factory. In Delhi Cloth & General Mills & Company Limited and Another v. Joint Secretary, Government of India & Others-1978 E.L.T. 121, the Delhi High Court construing Rules 9 and 49 held that the question of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmediary product is an identifiable marketable commodity and the retention of such product within the premises of the factory for using the same in the manufacture of ultimate product does not alter the situation. The Karnataka High Court in Devangere Cotton Mills Ltd. v. Union of India - 1986 (24) E.L.T. 507 held the intermediary products are exigible to levy under the unamended Rules 9 and 49 itself and the explanation is clarificatory and by way of abundant caution. 6. It is not in dispute that jute yarn is marketable and saleable by itself and therefore, the levy of cess is sustainable under the amended Rules 9 and 49. The learned counsel for the petitioner contends that a new dimension as to the effect of amended Rules 9 and 49 should ..... X X X X Extracts X X X X X X X X Extracts X X X X
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