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2017 (10) TMI 20 - BOMBAY HIGH COURTJob-work - cess on textiles and textile machinery manufactured in India - section 5A of the Textile Committee Act, 1963 - petitioner failed to provide details of job-work - whether the petitioners are owners of Garments or manufacturer of Garments? - Held that: - there shall be levied and collected a cess for the purposes of the TC Act, a duty of excise on all textiles and on all textile machinery manufactured in India. Sub-section (3) of section 5A says that the duty of excise levied under sub-section (1) shall be collected in accordance with the rules made in this behalf, from every manufacturer of textiles or textile machinery. Once it is conceded before us that this duty of excise levied under sub-section (1) of section 5A of the TC Act is in addition to any fees and duty leviable on textiles or textile machinery under any other law for the time being in force, then, there is no double taxation. What is running throughout the section 5A and prior sections together with the sub-sections thereof so also the Act as a whole is a common thread, namely, that this duty shall be levied and collected as a cess and as a duty of excise on all textiles and on all textile machinery manufactured in India. It is the manufacturer who shall pay to the Committee the amount of duty of excise levied under section 5A(1) within one month from the date he receives a notice of demand therefor from the Committee. The garments were manufactured by independent manufacturing organizations and these are independent establishments with their own factory sheds, machinery, labour and administrative skills and finance. The petitioners are in no way concerned with any aspect of running these independent units. These manufacturers are paid a fabrication charge for manufacturing garments, which are finalized periodically after appropriate negotiations and are in line with the market rates. The allegation was specifically denied and it was also denied that the manufacturer in this case is not a person employed as hired labour, namely, engaging in production and manufacturing of textile goods on account of the petitioners. Thus, the petitioners throughout clarified that there could be independent manufacturers of garments in the market to whom the petitioners may forward their fabric and it is not to the named or specified job worker and even otherwise this job worker is not an agent, but operating independent and on his own. There is absolutely no material referred in the Assessing Order or in the show cause notice which would enable the Assessing Officer to conclude that the petitioners can be brought within the purview of the Act and the cess can be recovered from them on the foundation that the process of manufacturing may be by independent persons, but under the control and supervision of the petitioners. A mere statement by the petitioners in their reply to the show cause notice or in the preceding correspondence that they gave specifications to the garment manufacturers to manufacture a specific garment which is capable of being then branded by the petitioners and sold under its popular name, is not enough to hold and conclude as above. That statement, without anything more, will not mean that there is such degree of supervision as is ordinarily expected and envisaged in law which would enable the authorities to conclude that it is really the petitioners including in such activities - the levy could not be imposed on petitioners. The impugned order is vitiated by total non application of mind, errors of law apparent on the face of the record and perversity, the writ petition succeeds. The impugned order cannot be sustained - petition allowed - decided in favor of petitioners.
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