1985 (5) TMI 53 - SC - Central Excise

Whether these various processes carried out by the petitioner company amount to bringing into existence different and distinct goods, commercially known as such, to attract levy of duty under Section 4 of the Central Excises and Salt Act, 1944?

Whether the impugned Act is ultra vires of entry 84 of List I of the Seventh Schedule?

Held that:- The conclusion that inevitably follows that in view of the amendment made in Section 2(f) of the Central Excises and Salt Act as well as the substitution of new Item 19 I and Item 22(1) in Excise Tariff in place of the original Items, the contentions of the petitioners cannot be accepted. Section 3 of the Central Excises and Salt Act clearly indicates that the object of the entries in the First Schedule is firstly to specify exciable goods and secondly to specify rates at which excise duty will be levied. Reference has already been made to Rule 56A. Under sub-rule (2) of the Rule 56A, it is expressly provided that a manufacturer will be given credit of the duty which is already paid on the articles used in the manufacture subject to certain conditions. It is stated before us that excise duty will be charged on processed printed material. Processors will be given credit for the duty already paid on the grey cloth by the manufacturer of the grey cloth. In this view of the matter we are of the opinion that the views expressed by the Bombay High Court in the case of New Shakti Dye Works Pvt. Ltd. and Mahalakshmi Dyeing and Printing Works v. Union of India and Anr. (1983 (6) TMI 174 - BOMBAY HIGH COURT) are correct. The views expressed by the Gujarat High Court in Vijay Textiles v. Union of India [1979 (1) TMI 101 - HIGH COURT OF GUJRAT AT AHMEDABAD] in so far as it held that the processed fabrics could only be taxed under residuary entry and not under Item, 19 I or Item 22 of the First Schedule of the Central Excise Tariff cannot be sustained. Appeal dismissed.