9911796707
TMI Blog1995 (5) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... preparations of cellulosic derivatives on job work basis. Thereafter, the fabrics became classifiable under Item 22(3) of the Central Excise Tariff as impregnated, etc. fabric. The issue in the case relates to the handloom cess payable under the Khadi & Other Handloom Industries Development Act, 1953 on fabrics impregnated, coated and laminated, falling under Item 22(3) C.E.T. Notification 115(E), dated 1-3-1975 issued under the Handloom Industries Act exempted all varieties of cloth which are for the time being exempt from Central Excise Duty. The second proviso to Notification, however, laid down that nothing contained in the notification will apply to processed man-made fabrics which are exempt from central excise duty. When the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de fabrics was not covered by the definition in the original Act for levying the cess. Therefore, this was the case of legislation by incorporation and as such unless subsequent amendment in the Tariff for Central Excise were also incorporated in the Khadi and Other Handloom Industries Act, the Department cannot seek to levy the cess on man-made fabrics at the material time not covered by the definition of cloth in the Khadi & Other Handloom Industries Act. The definition as it existed covered only silk or rayon or artificial silk fabrics which did not cover man-made fabrics. The ld. Counsel in this context cited and relied upon the case Mehta Bros. v. State of Gujarat reported in 1979 (43) STC 208 regarding scope of legislation by incorpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Addl. Excise Duty on Cloth) Act, 1953 as it stood at the relevant time covered, inter alia, silk and rayon or artificial silk fabrics and did not cover the goods as in the present case, namely, man-made fabrics, and it being a piece of legislation by incorporation, it is contended that man-made fabrics will not be liable at all to pay the cess. However, in our view, this is a case of referential legislation rather than legislation by incorporation. In a case arising under Kerala General Sales Tax Act exemption was granted from Sales-tax on goods specified in the Third Schedule to the Act. One class of goods to which exemption was granted was cotton fabrics as defined in the Central Excise Tariff. Subsequently, the ambit and meaning of "cott ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... processed man-made fabrics which are exempted from the duty of excise leviable thereon under the Central Excises and Salt Act, 1944 (1 of 1944)". 5. The appellants have argued that impregnated, coated, etc. fabrics fall under item 22(3) CET and are exempted from Central Excise duty as per Notification 225/82 and are also exempt from cess in terms of Notification 115(E) above. They have further urged that the second proviso to Notification 115(E) does not apply to man-made fabrics under Item 22(3) and that the expression `processed' appearing in the second proviso would only apply to those fabrics which fall under Item 22(i)(b) which covers man-made fabrics subjected to the process of bleaching, dyeing, printing, shrink-proofing, tente ..... X X X X Extracts X X X X X X X X Extracts X X X X
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