TMI Blog1991 (12) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... n of cess under the Act. The contentions urged by Shri Ganesan are accordingly rejected. Under the Schedule to the Central Excise Act, jute was taxed with reference to weight. So also was jute yarn; vide Entry 22A and 18D of the Schedule. Even the 1985 Act taxes jute and jute yarn by weight alone. The nature of the cess imposable under Section 9 is really that of duty of Central Excise, as emphasised hereinbefore. Evidently, for that reason the principle obtaining under the Central Excise Act has been adopted by this Act in the matter of levy of cess. We cannot agree with Shri Salve that according to Section 9, the cess can be levied on the basis of value alone and on no other basis. Appeal dismissed. - 2714-16 of 1981 , 2439-49/79, 2815-17/79 - - - Dated:- 3-12-1991 - P.B. Sawant and B.P. Jeevan Reddy, JJ. REPRESENTED BY : S/Shri Salve and Ganesan, Advocates, for the Appellants. Shri V.R. Reddy, First Addl. S.G., for the Respondents. [Judgment per : B.P. Jeevan Reddy, J.]. Common questions arise in this batch of Civil Appeals and the Writ Petition. All the appeals except one arise from the judgment of Calcutta High Court dismissing the Writ Petitions filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 3 of the Act defines certain expressions. For our purpose, it is sufficient to notice the definitions of Industrial undertaking in Clause (d) and of Scheduled Industry in Clause (i). They read as follows :- (d) industrial undertaking means any undertaking pertaining to a scheduled industry carried on in one or more factories by any person or authority including Government; (i) scheduled industry means any of the industries specified in the First Schedule". 5. The Act contains several provisions designed to promote and regulate the scheduled industries and their products. Section 6 provides for establishment and constitution of Development Councils and their functions. It empowers the Central Government to establish a Development Council for any scheduled industry or group of scheduled industries. Such Development Council has to perform such functions of a kind specified in the Second Schedule as may be assigned to it by the Central Government. Section 9 provides for levy of a cess which, after collection, is made over to the Development Council established under Section 6. The Development Council has to utilise the said fund for promoting scientific and indust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the sub-section are : (a) The Central Government is empowered to levy and collect as a cess a duty of excise for the purposes of the Act. (b) Such levy shall be on all goods manufactured or produced in such scheduled industry as is specified in the notification. (c) The rate of cess shall be such as may be specified in the notified order. (d) Different rates may be specified for different goods or different classes of goods. (e) However, no such rate prescribed by the notified order shall in any case exceed two annas per cent of the value of the goods. (f) The value shall be determined in the manner provided in the explanation to sub-section (1). 7. Section 30 confers the rule-making power upon the Central Government. Sub-section (1) empowers the Central Government to make rules made for carrying out the purposes of the Act. Sub-section (2) particularises the matters in respect of which rules can be made. Clause (c) of sub-section (2) empowers the Central Government to provide by rules, the intervals at which, the time within which, and the manner in which the cess leviable under Section 9 shall be payable and the rebate for the prompt payment of such cess. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nother year. Jute textile and jute yarn are both subjected to cess among other goods. 12. Notices were issued to all the jute manufacturers to pay the said cess at the specified rate on their products including jute twine and jute yarn, produced in their units. The cess was held payable even in respect of jute yarn and jute twine consumed within the same factory/unit in manufacturing jute textiles. Indeed the Collector of Central Excise and Customs, West Bengal clarified by a trade notice dated 28th April, 1977, that jute twine and jute yarn when consumed within the factory of production for conversion into manufactures falling under Tariff Item No. 22A were subject to levy of cess. It said that jute twine and yarn captively consumed within the same factory, though exempt from payment of Central Excise Duty, is yet liable to pay the cess under Section 9 of the Act. Several jute manufactures filed Writ Petitions in the Calcutta High Court challenging the levy of cess on several grounds all of which were rejected and Writ Petitions dismissed by a learned Single Judge. The petitioners thereupon carried the matters before a Division Bench by way of appeals under Clause 15 of Letters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rules made thereunder applicable in the matter of levy and collection of the said cess. Until the amendment of Rules 9 and 49 by Finance Act, 1982 (with retrospective effect from February, 1944), they provided for levy of excise duty only at the stage of removal. It meant that intermediate products which were captively consumed in the same factory could not be said to have been removed and, therefore, did not attract excise duty. This was the position when Rule 3 of the Cess Rules was made. (The rules as stated above, were made in February, 1976). This is a case of legislation by reference. In such a case, it is well settled, subsequent amendments and alterations made in the other enactment or Rules do not ipso facto get imported into these Rules. The imported provisions continue in the same form irrespective of any change that may have been effected in the Central Excise Act or the Rules made thereunder. (2) Under Rules 9 and 49, before their amendment, it was well settled that intermediate products captively consumed within the same factory/premises cannot be said to have been removed and hence, could not be subjected to duty. It must accordingly be held that intermediate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principle has been followed under the Act both for the sake of convenience and simplification. He submitted further that no material has been placed before the Court by the petitioners to show that the levy in question infringes the ceiling prescribed by the proviso to sub-section (1) of Section 9. 16. By making the declaration contemplated by Entry 52 of List I in the Seventh Schedule to the Constitution, the Parliament has placed the control of the industries specified in the First Schedule in the Union Government. The opening words of the First Schedule are any industry engaged in the manufacture or production of any of the articles mentioned under each of the following heads or sub-heading namely .... . Heading 23 in the Schedule reads, Textiles (including those dyed, printed or otherwise processed) . There are five sub-headings. They deal with cotton, jute, wool, silk and synthetic/artificial fibres respectively. Sub-heading 2 read alongwith the main heading would read as follows : Textiles, made wholly or in part of Jute including jute twine and rope. This sub-heading must be read alongwith Section 9 of the Act which empowers the Central Government to levy cess on all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to market. Therefore, they are goods manufactured in a scheduled industry. The fact that such yarn is captively consumed in the manufacture of jute textiles is of no relevance. In fact, this question is concluded by the decision of this Court in J.K. Cotton Spg. Wvg. Mills v. Union of India [1988 (1) S.C.R. 700 = 1987 (32) E.L.T. 234 (S.C.)], a decision rendered under the Central Excises and Salt Act. 18. We think it convenient to deal with the contentions of Shri Ganesan at this stage, which we have set out hereinbefore. His main contention is that Rule 3 of the Jute Cess Rules is a case of legislation by reference and that in such a case the provisions of the Central Excise Act and the rules made thereunder as they were obtaining on the date of making of Rule 3 continue in the same form, unaffected by subsequent amendments or changes in the Central Excise Act and Rules. He, therefore, says that the amendment effected in 1982 in Rules 9 and 49 of Central Excise Rules is not available/or applicable to the levy and collection of cess under Section 9 of the Act. He also points out that the Act does not confer upon the Central Government the power to make rules with retrospectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pealed against was contrary to law. However, by virtue of 1976 Amendment, Section 100 was substituted. Now, a second appeal lies only on one ground, namely in a case where the High Court is satisfied that the case involves a substantial question of law. The appellant filed an appeal under Section 55 on February 28, 1978, wherein the respondent raised an objection as to its maintainability on the ground that the appeal does not involve a substantial question of law within the meaning of amended Section 100 C.P.C. which was said to be applicable. The said objection was negatived by this Court holding that on a proper interpretation of Section 55, it must be held that the grounds specified in the then existing Section 100 C.P.C. were incorporated therein and the substitution of the new Section 100 did not affect or restrict the grounds as incorporated in Section 55. This was so held on the basis of the well settled proposition that - if a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those sections into the new Act just as if they had been actually written in it with the pen or print ..... X X X X Extracts X X X X X X X X Extracts X X X X
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