 bui no 32 of 1966 the produce cess bill, 1966 a billfo proride for the imposition of cess on certain produce jot the improvement and development of the methods of cultivation and rrr,qrketing of such prod'uce and fot matters connected thetewith be it enacted by parliament in the seventeenth year of the republic of india as follows:-1 (1) this act may be called the produce cess act, 1966 short utle and extent (2) it extends to the whole of india de1lnjuons s 2 in this act, un1ess the context otherwise requires,-(a) "collector" means the officer appointed by the centra] government to perform in any specified area the duties of a collector under the provisions of this act and the rules made thereunder, and includes any officer subordinate to that officer 10 whom he may, by order in writing, authorise to perform his de1ties under those provisions; (b) "cotton" means raw cotton, whether baled or loose, which has been ginned; (e) "custom:; port" has the meaning assigned to it in the r: 15 custums act, 1962; (d) "indian council of agricultural research" means the body registered in that name under the societies registration act, 1860; - (e) "lac" includes any form of manufactured or unmanufacturl'd lac othec than refuse lac; (f) "managirlg agent" has the meaning assigned to it in the companies act, 1956; (g) "mill" means,-i 25 (i) in relation to cotton, any place which is a factory as defined in section 2 of the factories act, 1948, and in which, or in any part of which, cotton is converted into yarn or thread either for sale as such or for conversion into cotton goods, (ii) in relation to copra or oil-seed and oil, any premi~ in which or in any part of which, copra or oil-seed, as th case may be, is crushed, or is ordinarily crushed, with l~ aid of power for the extraction of oil  explanation-"power" means electrical energy or ar" other form of energy, which is mechanically transmi,:~ and is not generated by human or animal agency, (iii) in relation to any other produce, such place as t~ central government may, by notification in the offici gazette, specify; (h) "occupier", in relation to any mill, means the perscll who has the ultimate control over the affairs of the mill alx where the said affairs are entrusted to a managing agc'nt, suet agent shall be dec'med to be the occupier of the mill; (i) "oil-sc'cd" docs not include copra: (j) "prescribed" means prescribed by rules made undr this act; (k) "produce" means any goods specified in the fiif schc·dule or the second schedule imposition of cess 3 (1) there shall be levied and collectc'd as a cess, fo!" the poses of this act, on cvctv produce specified in column :2 of first schedule, which is exported from any customs port to any beyond the limits of india, a duty of customs at such j"c!t(', exceeding the rate specified in the corresponding cntn' in column thereof, as the central government may, by notific3tion in ofllcial gazette, specify: provided that until such rate is specified by the central g ment, the duty of customs shall be levied and collected at the specified in the corresponding entry schedule (2) there shall be levied and collected as a cess, for the pli of this act, on every produce specified in column 2 of the schedule, a duty of excise at such rate, not exceedirg the specified in the corresponding entry in column 3 thereof as central government may, by notification in the ollicial g specify: provided that until such rate is specified by the central ment, the duty of excise shall be levied and collected at the specified in the corresporlding entry in column 4 of the said s " every duty of customs leviable under this act on any produce persons  bi b th b h  who shall "'all be paya eye person y w om such produce is exported be liable s:i f ""~!11 india and every duty of excise leviable under this act on any to pay   produce shall be payable by the occupier of the mill in which such duty s produce is consumed or extracted 5 (1) an amount equivalent to the proceeds of the duty appu-it"icd and collected under this act, reduced by the cost of cohee-~~~~e~d~f lion as determined by the central government, together with any of cess liloncys received by the central government for the purposes of 10 this act shall, after due appropriation made by parliament by law, ~ utilized by the central government to meet the expenditure incurred in connection with measures which, in the opinion of that (jo"crnment, are necessary or expedient to promote the improvement development and marketing of produce 15 (2) in particular, and without prejudice to the generality of the provisions of sub-section (1), the proceeds of the duty levied and collected under this act may be utilized by the central government for all or any of the following purposes, namely:-i~ (a) undertaking, assisting or encouraging, agricultural, industrial, technological and economic research, including research on the utilization of the products obtained from any produce; (b) supplying technical advice to cultivators, growers and millers; (c) encouraging the adoption of improved methods of cultivation and storage of crops; ( c1) producing, testing and distributing improved varieties of crops or assisting such work; (e) assisting in the control of insects and other pests and diseases of the crops, both in the field and in storage; (f) promoting the improvement of the marketing of produce and the products obtained therefropt in india and abroad including the setting up and adoption of grade standards for the produce and the products obtained therefrom;  ( g) collecting statistics from cultivators, growers, dealers ~d occupiers of mills on all relevant matters and promoting unprovement in the forecasting of crops and the preparation of all relevant statistics relating to the crops and the products obtained therefrom; (h) maiawald&', aad assisting in the maintenance of, sucb iastitutes, farms adtl stations as the central government jill)' codsider necessary ; (i) advising and providing assistance on all matters connected with the improvement of the cultivation of crops (includbt, s advising on the best and most suitable varieties of the crops to be cultivated) and the improvement of the indus1ries using the crops and the products obtained therefrom; (j) promoting and encouraging the co-operative movement in any connected industry; )0 i (k) adopting such measures as may be practicable for easuring remunerative returns to the growers; (l) organising the establishment of cultivators', growers', millers' and consumers' organisations; (m) aiding and encouraging the establishment of exhibitions for demonstrating the uses of the produce and the products obtained therefrom; (n) adopting any other measures which the central goven· ment may deem to be necessary or advisable to carry out the purposes of this act (3) in this section, "crops" means crops or plants from \vhich any produce is obtained retund of ees on out exportea from india 6 there shall be refunded from out of the proceeds of cess levied and collected under this act, on such conditions as may be prescribed, all sums col1ected as cess on the quantity of oils exported from india if such oils have been extracted from oil-seed or copra crushed id - mill in india, irrespective of whether the oil-seed or copra is produed in, or imported into, india 7 the occupier of every mill shall,-(a) if the mill was established before the commencement this act, within fourteen days from such commencement, and occupier to supply cer tain parti· culars to collector (b) if the mill is established after the commencement this act, within fourteen days from such establishment, furnish to the collector a statement containing the following culars, namely:-(i) the name and situation of the mill; (ii) the name and address of the occupier; (iii) the address to which the communications relating to mill may be sent; and (iv) the total capacity of the mill 8 (1) every occupier of a mill shall furnish to the collector every deuveryh  of mont -mo nth a return stating the total amount of produce, specified in the ly re- d turns second schedule, consumed or brought under processmg or extracte in the mill during the preceding month s (2) the return referred to in sub-section (1) shall be furnished before the seventh day of each month together with such other information as may be prescribed (3) every such return shall be made in such form and shall be \'crifled in such manner as may be prescribed 10 9 (1) on receiving any return made under section 8, the collec- collection tor shall assess the duty of excise payable on every produce specified f:vi:bfe in the second schedule, in respect of the period to which the return 0dn prouce relates, and if the amount has not already been paid, shall cause a specified notice to be served upon the occupier of the mill requiring him to a~nd 15 make payment of the amount assessed within ten days of the service schedule of the notice (2) if the occupier of any mill fails to furnish in due time the return referred to in section 8 or furnishes a return which the collector has reason to believe is incorrect or defective, the collector 20 shall assess the amount payable by him in such manner, if any} as may be prescribed, and the provisions of sub-section (1) shall thereupon apply as if such assessment had been made on the basis of a return furnished by the occupier: provided that, in the case of a return which he has reason to 2s believe is incorrect or defective, the collector shall not assess the duty of excise at an amount higher than that at which it is assessable on the basis of the return without giving to the occupier a reasonable opportunity of proving the correctness and completeness of the return lo (3) a notice under sub-section (1) may be served on the occupier of a mill either by registered post or by delivering or tendering it to the occupier or his agent at the mill 10 (1) any occupier of a mill who is· aggrieved by an assessment finality i 3s lilade under section 9 may, within three months of service of the of n t' asses5-o ice referred to in sub-section (1) of that section, appeal to such ment authority as the central government may, by notification in the oftlcial gazette, appoint in this behalf, for the cancellation or modifitation of the assessment and, on such appeal, the said authority 40 may cancel or modify the assessment and order the refund to such occupier of the whole or part, as the case may be, of the amount paid thereunder : provided that the authority so appointed shall not be inferior in rank to the collector by whom the assessment was made (2) the appellate authority may, if it is satisfied that the appellant was prevented by suffici«nt cause from presenting the appeal within the aforesaid period of three months, allow it to be presented within 5 a further period of one;> month (3) where the appellate' authority 1s of opinion that any duty of excise has be-en short-lc'vied,no order enhancing the duty of excise shall be made unless the appellant hus been given notice to show cause, within one month from the date d sen'ice thereof, against the :0 proposed order (4) the central government may, on the application of any person aggrieved by any order made under sub-section (1) or subsection (3), cancel ur modify such order if such appi:cation is made within six months from lhe date of the order made under sub-section 15 (1) or sub-section (3), as the case may be (5) the central governm:2nt may, if it is 5[ltisfied that the applicant was prevented by sufficient cause fror~l pl'l~cnting the application within the aforesaid penod of six months, ailo",; it to be presented within a further period of ole month j (6) the decision of the central government, and subject to the decision of the central government, the decision of the appellate authority, shall be final 11 (1) the collector shall in respect of any produce specified in the first schedule which is exported by sea asse5s and collect the duty of customs at the customs port of export collection of cess qil any preduce specified in first schedule (2) \vhere any produce specified in the first schedule is exported by land, the duty of cu~toms !eviab1e und~'r this act on such product shall be assessed and collected by such authority and in such manner as may be prescribed, and, until so prescribed, such duty of cus shall be  levied and collected in accordance with the law in immediately before the commencement of this act (3) the central board of excise and customs constituted the central boards of re\'enue act, 1963, may, by rules, specify conditions and restrictions subject to which--(a) refund may be made of the duty of customs levied on produce specified in the first schedule which is exported land, where such produce is subsequently imported into i (b) export may be made by land, without payment of duty of customs, of any produce specified in the first which is int-ended to be iroueht back to india 12 where any duty of customs or excise demanded trom any person or any penalty payable by any person under this act is not recovery of sums due to government 5 paid,-(a) the cdlector may deduct the amount so payable from any money owing to such pq!"!on which may be under the control of the collector or any other officer; or (b) the collector may recover the amount so payable by detaining and selling any good~ belonging to such person which are under the control of the collector or any other officer; or 10 (c) if the amount cannot be recovered from such person in the manner provided in clause (a) or clause (b), the collector may prepare a certificate sir,ned h:v him specifying the amount clue from such person and se'1d it to th~ collector of the district in which such i='ers()n ow:"ls a:iy p!'operty or resides or carries on 15 hi:'; b'-lsiness and the said collector shall, on receipt of such certificate, prcc(:'cd to recover from t~e said person the amount specified therein as if it were an arrear of land revenue n (1) the collector or an:' officer empowered by gcnera~ or power to ~pc'cial order of the centr21 go\'crnmont in this behalf shall have free ~fl?:ct ~ accl's~ 2lt all r('o';c:1ab~(:, :i!:"e~ durin',: "\'urking hours to any mill or and take copies of d'':, part of a mill account (2) the collector or any such officer may, at any time during " ,1rking ho'll's wit:- or without ljoticc ld the occupier, ex1mine the pt:rch~se sale rnd stock records and accounts of any mill and take !5 cfi?!f's ')f or extracts from all or an:' of the said records or accounts !rjr the purpose of tos! ing the jccur}cy of any return or of informing ~::~:~c·' f a~ to the p2r~ !clhr:; rc'g:udin'r \\'hich information is required !'r the purpos€s of this act or any rules made thereunder: p!'()i'idcd th3! n(\~h:'1g in this sc'ctinn shall be del'mcd to authorize )) ':'~ examination of any description or formulae of any trade process 1 t (1) all such copies and extracts and all information acquired infor-::; d collector or an"v other offic'er from any inspection of any mill mation ac-quired to '!' ~r')m any retun: submitted under this act shall be treated as be con-~ !'~ j~" t i :11 fldential (?, if th: collector or any ~;uch off!cer discloses to any person, r· \  (:!' than a ~uperior officer, any such information as aforesaid, with· ~'i~ the previous sanction of the central government, he shall be r''::")ishable with imprisonment for a term which may extend lo six t),:,nths and shall also be liable to fine: , provided that nothing in this section shall apply to the disclo:mre of any such information for the purpoi,e of a pr08ecution in respect the making of a fal:;e return under this act provisions of certain acts to apply 15 (1) the provlslons of the customs act, 1962, and the rules 52, and regulations made thereunder, including those relating to refunds and exemptions from duty, shall, so far as may be, apply in relation to the levy and collection of duties of customs on any produce specified in the first schedule as they apply in relation to the levy s and collection of duty payable to the central government under that act (2) the provisions of the central excises and salt act, 1944, and loj the rules made thereunder, including those relating to refunds and exemptions from duty, shall, so far as may be, apply in relation to j~i the levy and collection of duties of excise on any produce specified in the seco!1d schedule as they apply in relation to the levy and collection of duty payable to the central government under that act offences 16 (1) whoever-(a) evades the payment of any duty of customs or excise i! payable under this act, or (b) fails to furnish any return or information which it is his duty to furnish under this act or furnishes a return or information which is false in material particulars or which he does not believe to be true, or (c) obstructs the collector or any other officer in th(' performance of his duties under this act or any rules made thereunder, shall be punishable with imprisonment for a term which may extend to six montil~, or with fine which may extend to two thousand rupees or wi th both (2) any court trying an offence under this act may direct thl't any produce in respect of which it is satisfied that an offence punishable under this act has been committed shall be forfeited to gove~ ment and may also direct that all packages, coverings or receptacles in which such produce is contained and every animal vehicle, "esse or other conveyance used in carrying such produce shall be forfeited 10 government limitation of prosecution 17 no prosecution for any offence punishable under this act be instituted against any person except by, or with the conspj1t the collector composition of offences 18 any offence punishable under this act may, either before after the institution of the prosecution, be compounded by collector or any other officer authorised by him in this behalf payment to the central government, for the purposes of this of such sum as the collector or such officer, as the case may thinks fit ot action taken in good faith 19 (1) no suit, prosecution or other legal proceeding shall lie against the central government or any person authorized by the central government for anything which is in good faith done or intended to be done in pursuance of this act or any rule or order 5 made thereunder (2) no suit or other legal proceeding shall lie against the central government or any person authorized by the central government for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of any of the 10 provisions of this act or any rule or order made thereunder 20 (1) the central government may, by notification in the ~oa~:r to official gazette, make rules to carry out the purposes of this act rules (2) in particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the !ollow-15 ing matters, namely:-(a) conditions subject to which refund may be made of any sums collected as duties of excise on any quantity of oil exported from india; (b) the form of the monthly return which every occupier 20 of a mill should submit to the collector and the manner in which such return shall be verified; (c) information which every occupier may be required to furnish in the monthly returns; (d) manner in which assessment of duties of excise shall be 25 made where no return has been furnished or the return which has been furnished is believed by the collector to be incorrect or defective; (e) the authority by which and the manner in which the duties of customs leviable under this act shall be collected on 30 any produce specified in the first schedule which is exported by land; and (f) any other matter which is required to be, or may be, prescribed 21 if any difficulty arises in giving effect to the provisions of power tc j) this act, the central government may, by order, make such directions drei'2!°v1et  , 1i1cu les not inconsistent with the provisions of this act, as appear to it to be necessary or expedient for the removal of the difficulty: provided that no such directions shall be made after the expiry of a period of three years from the date of commencement of this 40 act extension of application of the act  •22 the central government may, after consultation with the indian council of agricultural research, by notification in the official gazette, declare that the provisions of this act shall apply to a produce not included in the first schedule or the second schedule and specify respectively in columns 3 and 4 thereof the maximum 5 rate of such cess and the actual rate at which such cess shall be levied and collected on such produce until a different rate is specified by the central government by notification in the official gazette, and on the publication of such notification, such produce and such rate shall be deemed to be included in the first schedule or the 10 second schedule, as the case may be rules and notifications to be laid before parliament 23 every rule made under this act and every notification made under section 22 shall be laid as soon as may be after it is made, before each house of parliament while it is in session for a total period of thirty days which may be comprised in one ses£ion or in two 15 successive ses-sions, and if, before the expiry of the session in which it is so laid or the successive sessions aforesaid, both houses agree in making any modification in the rule or in the notification or both houses agree that the rule or the notification should not be made, the rule or the notification shall thereafter have effect only 20 in such modified form or be of no effect as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under the rule or the notification  the first schedule [see section 3 (1)]-s i i no i name of the the maximum produce rate at which duty of customs may be collected 5 actual rate at which duty of customs is to be collected until a different rate is specified by the central government i i i 10 -2 3 4 i i i i i rupees two and thirty paise per quintal lac produced in rupees two and india thirty paise per quintal i i 2 15 i refuse lac produced rupee one and in india seventy paise per quintal rupee one and seventy paise per quintal , i  the second schedule [see section 3 (2)]20 name of the produce s i n°'i the maximum rate at which duty of excise may be collected 25 actual rate at which duty of excise is to be collected until a different rate is specified by the central government 2 3 4 i 30 cotton consumed in any mill in india i with a view to producing or manufacturing any goods therefrom one rupee per bale of 181' 4 kilograms, or in the case of unbaled cotton, twentyeight paise per 50 kilograms seventy-five paise per bale of lsi: 4 kilograms, or 10 the case of unbaled cotton, twenty-one paise per 50 kilograms 2 3s sixty paise per quintal of copra sevemy-fi ve paise per quintal of copra copra consumed in any mill in indiq with a view to producing or manufacturing any goods therefrom 3 one rupee per quintal of oil sixty paise per quintal, of oil oil~ extracted from oil-seed crushed in any mill in india  declaration under the provisional collection of taxes act, 1931it is hereby declared that it is expedient in the public interest that the provisions of clause 3 of this bill and the first schedule and the second schedule thereto shall have immediate effect under the provisional collection of taxes act 1931 16 of is]!  statement of objects and reasonsthe indian cotton cess act, 1923, the indian lac cess act, 1930, the indian coconut committee act, 1944, and the indian oilseeds committee act, 1946, will cease to have effect from 1st april, 1966 on which date the indian central cotton committee, the indian lac cess committeej the indian central coconut committee, and the indian central oilseeds committee, constituted under those acts will stand dissolved, and there will be no legislative sanction for the continuance of the levy of cess on these produce after 31st march, 1966 2 although the committees have been abolished, the work done by the committees will continue to be carried out even after 31st march,1966 the research institutes and stations and other research projects of these committees will come under the administrative control of the indian council of agricultural research and the work relating to development, marketing and other functions will be directly looked after by the ministry of food and agriculture, department of agriculture, assisted by development councils formed for this purpose by the government suitable grants will be given to the indian council of agricultural research for the maintenance of the research institutes and for carrying on the research activities under the revised set-up, larger investments will be necessary on these produce in order to have an effective programme of research and development it is therefore very necessary that the cesses on these produce are continued to be levied even after the commodity committees have been abolished 3 the bill accordingly seeks to continue the levy of cess on these produce 4 opportunity has also been taken to simplify the nature of cess levied on the produce and to re-assess the rate of cess to be levied, in conformity with the present prices of the produce new delhi; the24th march, 1966 c subramaniam  president's recommendation under article 117 of the constitution of india ,[copy of letter no 2-2/65-reorgan(cc) dated the 25th march, 1966, from shri c subramaniam, minister of food, agriculture, community development and co-operation to the secretary, lok sabha] the president having been informed of the subject matter of the produce cess bill, 1966, recommends the introduction and consideration of the bill in the lok sabha under article 117(1) and 117(3) of the constitution of india the bill provides for the levy and collection of cess in the nature of a duty of customs in respect of items in the first schedule, and a duty of excise in respect of items in the second schedule the collections made through the existing revenue collection organisation are to be credited to the consolidated fund of india grants-in-aid will be given to the indian council of agricultural research for conduct of research and the department of agriculture will finance specific development projects relating to these produce the organisation to execute the development schemes in the department of agriculture would be the regional development offices which are in the process of formation and for which an ad hoc provision of rs 10 lakhs has been made in the budget for 1966-67 the revenue from the proposed cesses, on the basis of the present level of production and export of the commodities concerned, is estimated to be of the order of about rs 134·50 lakhs per annum the expenditure on the various measures enumerated in clause 5 is estimated to be about rs 297 lakhs in 1966-67 ',', )~ \;  -  memorandum regarding delegated legislationclause 20 of the bill empowers the central government to make rules providing for the authority and the manner in which the cess should be collected, the form and information to be furnished in the returns to be submitted to the collectors, assessment of cess i where no return has been furnished, and the conditions subject to which refunds may be made ip respect of oil exported from india the matters in respect of which rules may be made relate to procedure and details therefore, the delegation of legislative power is of a normal character  a billto provide for the imposition of cess on certain produce for the improvement and development of the methods of cultivation and marketing of such produce and for matters connected therewith      (shri c subramam·am, minister of food, agriculture, community development and co-operation) 