SHREE JAGADAMBA TEXTILES P LTD Vs. TEXTILES COMMITTEE

JUDGEMENT

(1.) In all these cases, as a common question of law is involved, they were heard together and are being disposed of by this common judgment.

(2.) The petitioners are running their processing units where exclusively bleaching, dyeing, printing, finishing and other processing activities in respect of textile fabric/cloth are carried out. According to them, they do not carry on activity of spinning yarn or weaving textile fabric/cloth. They process textile fabric/cloth on ownership basis and/or job work basis. Thus, the petitioners, working on ownership basis, purchase textile fabrics/cloth and process the same and upon completion of the process, sell such finished textile fabrics/cloth into the markets raising invoices on its own name. Whereas, those processing units, working on job work basis, process fabric/cloth which is owned and supplied by the third party and upon completing the processing job, such petitioners return the processed textile fabric/cloth to such original owner/supplier and raise invoices for job charges only. Thus, according to the petitioners, they act as a bailee.

(3.) The petitioners hold requisite license under the provisions of the Central Excise & Salt Act, 1944 and the Rules framed thereunder. They have filed monthly returns of their respective clearances under the provisions of the Central Excise Act. The respondents computed and demanded cess under the provisions of the Textiles Committee Act, 1963 on the basis of the clearances shown in the monthly returns filed under the provisions of the Central Excise Act. According to them, presently the Central Excise is levied at the option of the assessee either at the stage of manufacturing yarn or at the stage of clearance of such textile fabrics with availability of MODVAT. On the basis of the particulars of clearances, the cess has been demanded by the respondents. It has been demanded from all independent processing units as also the units who claim to be processing fabrics/cloth on job work basis.