LexEMPIRE INDUSTRIES LIMITED & ORS. ETC. versus UNION OF INDIA & ORS. ETC.
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A B c D E F G B 292 EMPIRE INDUSTRIES LIMITED & ORS. ETC. v. UNION OF INDIA & ORS. ETC. May 6, 1985 [S. MURTAZA FAZAL ALI, A. VARADARAJAN AND SABYASACHI MUKHARH, JJ.] Central Excise and Salt Act, 1944, (Act I of 1944), section 2 (f) (v) (•i) and (vil)-Definition of 'Manufacture' as amended by the Central Excise and Salt and Additional Dutle> of Excise (Amendment) Act, (Act vi of 1980)-Legislative competency to make amendment-Whether the Amendment Act is violative of Articles 14, 19 (I) (g) and Entry 84 of List I of the Seventh Schedule of the Constitution-Concept of "Manufacture" - Whelher the various processes of bleaching, mercerising, dyeing, printing etc. of cotton fabrics and woolen fabircs man.made fabrics as mentioned in items 19 and 22 of the Schedule to the Central Excises and Salt Act amount to "Manufacture", as the Act stood prior to the Amendment Act, so as to attract levy of duty under section 4 of the Act-Whether the Amendment Act In any event is valid under Entry 97 of List I of the Seventh Schedt1le of the Constitution-Retrospective legislation whether permissible-- Evidence not produced elear but that sought to be produced in the Supreme Court, acceptance of-Passing of Interim orders, aviationjvaction by the Court in fiscal matters, causing of. In Vijay Textile Mill& v. Union of India reported in (1979) 4 E.L.T.J. 181, the Gujarat High Court by its decision dated 21. l.1979 held that cotton fabrics subjected to bleachiag, dyeing and printing could not be subjected to excise duty under Item 19 (!) (b) of the First Schedule to the Central Excises and Salt Act, 1944 is at twenty p~r cent ad-valorem these activities not being taxable event in the light of section 3 read with 2(d) of the Act. The Gujarat High Court proceeded on the footing that the processes of bleaching, dyeing and printing were manufacturing processes and held that excise duty would at least be leviable under residuary Item No. 6S of the First Schedule and therefore, liable to levy at eight per cent ad·valorem, the High Court directed the "Excise authorities to calculate the ad valorem excise duty during the period of three years immediately preceding the institution of each petition before the Court and calculate the excise duty payable by each of these petitioners under Item 68 only in respect of the value added by each of the petitioners by the processing of the fabric concerned. The excise duty paid in excess of such ad valorem duty under Item 68 during the period of three years immediately preceding the institution of the respective Special Application is ordered to be refunded to the petitioners concerned in each of their petitions." Jn Real Honest Textiles and Ors. v. Union of India (now in appeal) the Gujarat High Court passed similar directions after declaring that the levy and l'pllel'tiop pf excise duty and •\lditipnal duty on processe\l 111an-made fabrics - EMPIRE INDUSTRiES v. UNION 293 under Tariff Item 22(1) of the Additional Duties of Excise (Goods of Special Importance) Act, !957 was ultra vires. Since the decisions of the Gujarat High Court on 24.1.1979 in these two cases, the petitioners and the processing houses like the petitioners have been claiming refund. The President of India promulgated an Ordinance being Central ordinance No. f2 of 1979 called the Central Excises and Salt and Additional Duties of Fxcise (Amendment) Ordinance 1979. The said Ordinance was replaced by the Act VI of 1980 called the Central Excises and Salt and Additional Duties of Excise (Amendment) Act, 1980, giving retrospective effect to the Act from 24th February 1979. By section 2 of the Act, section 2(f) of the Excise Duty Act was amended by adding three sub items in the definition "manufacture" so as to include the activities like bleaching, dyeing, printing etc. covered by the two decisions of the Gujarat High Court. Similar '"amend .. ments were made in items 19(1), 21 <I) and 22 (!) of the First Schedule with retrospective effect. Section 5(2) (b) of the Amending Act provided "no suit or other proceedings shall be maintained or continued in any other Court for the refund of the duty collected and no enforcement shall be made by any Court of any decree or order directing the refund of such duties of excise which have been collected and which may have been collected." as if the provisions of section S of the Act VI of 1980 had been in force on and from the appointed d
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