1. This petition under Article 226 is directed against common order dated 22-11-2002 passed by the Textile Committee Cess Appellate Tribunal dismissing the appeals filed by the petitioner under section 5-C of the Textile Committee Act, 1963, hereinafter referred to as the 'Act'.
2. The petitioner is a company registered under the Companies Act, 1956 and having their factory at Kolhapur. The petitioner applied to the Government of India, Ministry of Industry for grant of industrial licence for establishing 100% export oriented unit under the provisions of Industrial (Development and Regulation) Act, 1951. Pursuant to the said application made by the petitioners for grant of industrial licence for 100% export oriented unit, the petitioner was issued the licence on 16-2-1989 by the Ministry of Industry. The licence, inter alia, mentioned that the finished products authorised for manufacture under the scheme will be exempt from excise and other central levies. The petitioner was served with demand notice for payment of cess by the Textile Committee i.e. respondent No. 4. The petitioner, towards the said demand notices paid a sum of Rs. 7,23,331/-. The petitioner was thereafter served with a demand notice by the Textile Committee for the period from September 1995 to June 2000. The petitioner preferred appeals before the Tribunal challenging the demand notices issued by the Textile Committee. The Tribunal by the impugned order dismissed all the appeals.
3. Before adverting to the submissions advanced by the learned Counsel for the parties, it would be necessary to notice some of the salient provisions of the Act on which the learned Counsel for the parties have based their arguments.
4. The Act, as stated in the long preamble has been enacted with the sole object and purpose to provide for the establishment of Committee for ensuring the quality of textiles and textile machinery and the matters connected therewith. Section 3 of the Act provides for the establishment of Textiles Committee by the Central Government and section 4 deals with it functions, stated generally, are to ensure 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 section as arrears of land revenue.
5. Section 5-A, inserted by Act No. 51 of 1973 which is a charging section reads as under :
'5-A(1) There shall be levied and collected as a cess for the purposes 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 fix.
Provided that no such cess shall be levied on textiles manufactured from out of handloom or powerloom industry.
The duty of excise levied under sub-section (1) shall be in addition to any cess or duty leviable on textiles or textiles machinery under any other law for the time 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 5-C and 5-D 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 received a notice of demand therefor, from the Committee.
(5) For the purpose of enabling the Committee to asses 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 such other particulars as may be prescribed.
(6) If any manufacturer fails to furnish the return referred to in sub-section (5) within the time specified therein, or furnishes a return which the Committee has reason to believe is incorrect or defective, the Committee may assess the amount of the duty of excise in such manner as may be prescribed.
(7) Any manufacturer aggrieved by an assessment made under this section may appeal to the Tribunal, constituted under section 5-B for cancellation or modification of the assessment.'
6. Section 5-E of the Act confers power on the Central Government to exempt such variety of textiles or such textile machinery as may be specified in the notification from the whole or any part of the duty of excise leviable under section 5-A. Section 5-E is reproduced below:
'5-E. If the Central Government is of opinion that in the interests or in the public interest it is necessary so to do, it may, by notification in the Official Gazette exempt such variety of textiles or such textile machinery as may be specified in the notification from the whole or any part of the duty of excise leviable under section 5-A.'
7. On behalf of the petitioners, the learned Counsel strenuously contended that the petitioner being 100% export oriented unit and being exempted by Export Commissioner from all central levies, the imposition of the said levy is unsustainable. The learned Counsel also relied upon the Resolution deed 31-12-1980 of the Union of India, published in Gazette of India Part I in support of his submission. In particular reliance was placed on condition (ii) of the said Resolution providing that import of capital goods, components and raw materials as well as finished products shall also be exempt from excise and other central levies. On the other hand the learned Counsel for the respondents contended that the Act is a complete Code and it empowers the Textiles Committee to levy and collect the cess leviable under the said Act and the textile industry as a whole is benefited from the provisions of the said Act and its implementation. So levy of cess as per the said Act is valid and in accordance with law.
8. Having examined the matter in the light of the provisions of the Act we are unable to persuade ourselves to accept any of the contentions raised on behalf of the petitioner. Section 5-A(2) of the Act provides that duty leviable on textiles under sub-section (1) shall be in addition to any cess or duty leviable on the textile or textile machinery under any other law for the time being in force. Section 5-A(1) of the Act provides that cess under the said Act shall be leviable and collected for the purpose of this Act. Section 5-E of the Act confers power on the Central Government to grant exemption from the whole or part of the levy. Thus exemption and exclusion of levy of cess have been spelt out in the Act itself and unless there is notification issued under section 5-E of the Act, petitioner is not entitled to claim exemption from the levy of cess. It is not disputed before us that the Central Government has not specifically exempted the petitioner's unit under section 5-E of the Act from paying the duty leviable under section 5-A of the Act. It appears that the Government of India has taken a policy decision not to grant exemption to export oriented units from payment of textile cess. In the absence of the notification under section 5-E of the Act it is not possible to accept the contention of the petitioner that their unit is exempt from levy of cess under the Act.