1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CUSTOMS APPEAL NO. 8 OF 2006 M/s.Shree Rajasthan Texchem Limited, SRSL House, Pulla Bhuvan Marg, N.H.8, Udaipur- 313 001. Rajasthan. ... Appellant. V/s. 1. Union of India, Aaykar Bhavan, 2nd Floor, New Marine Lines, Mumbai-20. 2. Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench, 3rd, 4th & 5th Floors, Jai Centre, P.D Mello Road, Poona Street, Masjid (E), Mumbai- 400 009. 3. The Assistant Commissioner, Of Customs, EPCG Section, New Custom House, Mumbai- 400 001. ... Respondents. Ashok Singh i/b. Ms.A.V.Latne for the appellant. A.S.Rao with R.B.Pardeshi for the respondents. CORAM : V.C.DAGA AND K.K.TATED, JJ. DATED : 2nd March 2010. JUDGMENT : (Per V.C.DAGA, J.) Heard learned counsel for the rival parties. Perused appeal. 2 Question of Law : 2. This appeal filed by the appellant M/s. Shree Rajasthan Texchem Limited was admitted vide order dated 6th March, 2006 to consider whether Cess levied under section 5 of Textile Committees Act, 1963 is includable as a component of CVD? Factual Matrix : 3. The factual matrix reveals that the appellant is a manufacturer of Yarn. They had imported capital goods being Textile Machinery under bill of entry Nos. 11333 dated 28th September, 1995 and 11122 dated 31st October, 1995 and declared the same under Customs notification No.110/95-Cus dated 5th June, 1995 and claimed exemption from payment of customs duty in excess of 15% and whole of additional duties of excise. 4. The Assistant Commissioner of Customs, E.P.C.G. (Gr.6), Mumbai issued a Less Charge Demand Notice dated 27th November, 1996 calling upon the appellant to deposit a sum of Rs.38,723/- who had not paid the cess at the rate of 5% which was payable under Textile Committee Act, 1963. It was alleged in the demand notice that the said cess was not exempted in terms of notification No.110/95- Cus dated 5th June, 1995 referred to herein as such the appellant was liable to make payment of cess. 5. The appellant contested the above demand notice raising the contention that the element of cess was part of additional duty of excise and the same was exempted, hence, appellant was not liable to pay cess. 3 6. The Assistant Commissioner of Customs, E.P.C.G. Vide its order dated 31st October, 1998 confirmed the demand of cess in the sum of Rs.38,723/- against the appellant and directed recovery thereof under section 28 of the Customs Act, 1962. 7. Aggrieved by the aforesaid order, the appellant filed appeal before the Commissioner of Customs (Appeals), Mumbai, who was pleased to set aside the order of the Assistant Commissioner and allowed appeal upholding the contention raised by the appellant. 8. The Revenue, not satisfied with the above order, invoked appellate jurisdiction of the Customs , Excise and Service Tax Tribunal, Mumbai ( Tribunal for short). The Tribunal, vide its order dated 8th June, 2005, was pleased to hold that the cess was leviable on the imported Textile Machinery even though CVD was `nil . The Tribunal set aside the order of the Commissioner by allowing the appeal filed by the department. 9. Being aggrieved by the aforesaid order, the present appellant has invoked appellate jurisdiction of this Court contending that the cess levied under section 5 of the Textile Committees Act being component of CVD it was exempted as such it was not payable. In other words, the CVD leviable being nil, no cess was payable. The reliance was placed on the judgment of the Tribunal in the case of Morarjee Brembana Ltd. v. Collector of Central Excise, 2003 (154) ELT 500 (Tribunal); wherein the Tribunal had observed that the cess leviable under the provisions of section 5A of the Textile Committees Act on the fabric manufactured or produced in India was nothing but the part of CVD duty. 4 10. The aforesaid contention of the appellant was countered by the learned counsel appearing for the Revenue contending that the cess is being levied under the separate legislation, namely; Textile Committees Act, 1963, as such it is independent legislation. According to him, unless separate notification is issued in exercise of powers under the provisions of the Textile Committees Act, the exemption from that levy of cess cannot be inferred. In support of this submission, reliance was placed on the judgment of the Apex Court in the case of Union of India v. Modi Rubber Limited, 2986 (25) ELT 849 (SC). He also urged that the said judgment of the Apex Court in Modi Rubber Limited (supra) was followed by the Tribunal in the case of Collector of Central Excise v. Ballarpur Industries Ltd., 1999 (111) ELT 857 (Tri). Consideration : 11. Having heard rival parties, the question of law sought to be raised and canvassed revolves around the interpretation of the notification No.110/95-Cus dated 5th June, 1995 whereunder the Central Government had granted exemption from payment of customs duty in excess of 15% and whole of additional duty of excise. Reading of the said notification nowhere refers to the grant of exemption from the payment of cess payable under section 5A of the Textile Committees Act. The subject notification nowhere in the preamble refers to the grant of exemption from payment of cess under the Act under which the cess is being levied. The Apex Court in the case of Modi Rubber Limited (supra) has observed as under: 5 The respondents have in fact produced several notifications granting exemption in respect of special duty of excise or additional duty of excise and in each of these notifications, we find that the source of power is described as sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 read with the relevant provision of the statute levying special duty of excise or additional duty of excise by which the provisions of the Central Excise and Salt Act, 1944 and the Rules made thereunder including those relating to exemption from duty are made applicable. Moreover the exemption granted under all these Notifications specifically refers to special duty of excise or additional duty of excise, as the case may be. It is, therefore, clear that where a notification granting exemption is issued only under sub-rule (1) of Rule 8 of the Central Excise Rules 1944 without reference to any other statute making the provisions of the Central Excise and Salt Act, 1944 and the Rules made thereunder applicable to the levy and collection of special, auxiliary or any other kind of excise duty levied under such statute, the exemption must be read as limited to the duty of excise payable under the Central Excise and Salt Act, 1944 and cannot cover such special, auxiliary or other kind of duty of excise. The Notifications in the present case were issued under sub-rule (1) of Rule 8 of the Central Excise Rules 1944 simpliciter without reference to any other statute and hence the exemption granted under these two Notifications must be construed as limited only to the duty of excise payable under the Central Excise and Salt Act, 1944. (emphasis supplied) 6 12. Following the ratio of the Supreme Court decision referred to above, we hold that in the facts and circumstances of the case exemption from payment of cess was not available to the appellant for want of specific notification in that behalf. No material is placed before us to infer that the cess leviable under the Textile Committees Act was component of CVD. So far as reliance placed by the appellant on the case of Morarjee Brembana Ltd. (supra) is concerned, the same is misplaced. In the facts of that case, the element of cess may have been included in the CVD but in the case in hand no such material is produced before us to take view in consonance with the view taken by the Tribunal in the case of Morarjee Brembana Ltd. (supra). 13. In the result, the question raised is answered in negative i.e. in favour of the Revenue and against the Assessee. Appeal is dismissed with no order as to costs. (K.K.TATED, J.) (V.C.DAGA J.)