PASUPATI FABRICS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) Petitioner No.1, which is a company incorporated under the Indian Companies Act, is a 100% Export Oriented Unit (ECU). Petitioner No.2 is its Company Secretary and General Manager (Admn.). In this writ petition, petitioners are challenging the action of the respondent no.3 in demanding Textile Cess levied under Section 5-A of the Textile Committee Act, 1963 (hereinafter to be referred as 'Act' for short) from the petitioner No.l (hereinafter called as 'petitioner company' for short). The case of the petitioners is that as the petitioner company is a 100% EOU, it is exempted from payment of such cess. It is not in dispute that the petitioner company is otherwise exempted from payment of excise duty and other central levies being 100% EOU.

(2.) The facts are in narrow compass and may be noted in the first instance.

(3.) The petitioner company has been set up for manufacture of cotton fabrics. It applied to the respondents 1 and 2 for grant of permission/licence to set up 100% EOU. At that time representation was made by the Government of India i.e. the respondents 1 and 2 that as per their Policy, EOU would be exempted from duties, cesses and other central levies in the nature of excise, custom duties etc. A letter of permission dated 18.5.1994 was issued by the Ministry of Industry, which inter alia stated that the petitioner company was permitted to manufacture cotton shirting, bed sheeting on conditions attached thereto. Condition Nos.2 and 3 annexed to the letter of permission are as under: