,  bllt no 80 of 197 , the central excises and salt and additional duties of excise (amendment) bill, 1979 a billfurther to amend the central excises and salt act, 1944, and the additional duties of excise (goods of special importance) act" 1957 "-be it enacted by parliament in the thirtieth year of the republic of india as follows: -- 1 this act may be called the central excises and salt and additional short duties of excise (amendment) act, 1979 title s 2 in the central excises and salt act, 1944 (hereinafter referred to amendas the central excises act), in section 2, in clause (f), after sub-clause ment (iv), the following sub-clauses shall be inserted, namely: _ of section 2 of act 1 01 u(w in relation to goods comprised in item no 19 i of the first 1944 schedule, includes bleaching, mercerising, dyeing, printing, water-10 proofing, rubberising, shrink-proofin~ organ die processing or any other process or anyone or more of these processes;  (vi) in relation to ~oods comprised in item no 21(1) of the first schedule, includes milling, raising, blowing, tenteringj dyeing or any other process or anyone or more of these processes; (vii) in relation to goods comprised in item no 22(1) of the first schedule, includes bleacbi~ dyeing, printing, shrink-proofing, tentering beat-setting, crease resistant processing or any other process or anyone or more of these processes;"  3 in the central excises act, in the first schedule--(i) in item 19 for sub-item i, the following sub-item shall be substituted, namely:--amend-dli!nt of first schedule of act 1 of 1944 "i cotton fabrics, other than (i) embroidery in the piece, in strips or in motifs, and (ii) fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other arti- 10 ticial plastic materials-twen ty per cent ad valorem (a) cotton fabrics not subjected to any process twenty per cent ad valorem, ",' is (b) cotton fabrics subjected to the process of bleaching, mercerising dyeing, printing water-proofing, rubberising, shrink-proofing organdie processing or any other process or any two or more of these processes (ii) in item 21 for subitem (1), 'the following sub-item shall be 20 substituted, namely:-"(1) woollen fabrics other than embroidery in the piece, in strips or in motifs-'   (a) woollen fabrics not subjected to any process twelve per cent ad valorem 2$ twelve per cent ad valorem"; (b) woollen fabrics subjected to the process of milling raising, blowing tentering, dyeing or any other process or any two or more of these processes (iii) ~ item 22, for sub-item (1), the following sub-item shall be substituted, namely:-"(1) man-made fabrics, other than (i) embroidery in the piece, in strips or in motifs and (ii) fabrics impregnated" coated or laminated with preparations of cellulose derivatives or of other 3s artificial plastic  materials-(a) manmade fabrics not subjected to any process twenty per cent ad valorem plus rupees five per square metre t~enty per cent ad valorem plus rupees five per square metre" (b) man-made fabrics subjected to the process of bleaching, dyeing printing, shrinkproofing, tentering hest-setting, crease resistant proce~sing or any other process or any two or more of these processes 4 in the additional duties of excise (goods of special importance) act, 1957, in the first schedule-amendment of firat schedule of act 58 of 1957 (i) in item 19, for sub-item i, the following sub-item shall be substituted, namely:-5 "i cotton fabrics, other than (i) embroidery in the piece, in strips or in motifs, and (ii) fabrics impregnated coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials-10 (a) cotton fabrics, not subjected to any process five per cent ad valorem five per cent ad valorem!'; 15 (b) cotton fabrics, subjected to the process of bleaching, mercerising, dyeing, printing, water-proofing rubberising shrink-proofing, organdie processing or any other process or any two or more of these processes (ii) in item 21, for sub  item (1), the following sub-item shall be substituted namely:-| "(1) woollen fabrics,         | other      | than    | embroidery    | in       | the    | piece    ||-------------------------------|------------|---------|---------------|----------|--------|-----------|| strips                        | or         |         |               |          |        |           || in                            |            |         |               |          |        |           || motifs-                       |            |         |               |          |        |           || five                          |            |         |               |          |        |           || per                           | cent      |         |               |          |        |           || ad valorem                   |            |         |               |          |        |           || (a)                           |            |         |               |          |        |           || woollen                       | fabrics,   | not     | subjected to  |          |        |           || any                           | process    |         |               |          |        |           || five per cent                |            |         |               |          |        |           || ad                            |            |         |               |          |        |           || valorem";                    |            |         |               |          |        |           || 25                            |            |         |               |          |        |           || (b)                           |            |         |               |          |        |           || woollen fabrics, subjected to |            |         |               |          |        |           || the                           | process    | of      | milling,      | raising |        |           || blowing,                      | tentering, | dyeing  |               |          |        |           || or                            | any        |         |               |          |        |           || other                         | process    | or      | any           | two      | or     | more of   || these processes               |            |         |               |          |        |           |(iii) in item 22, for sub-item (1), the following sub-item shall be substituted, namely:-30 u(1) manmade fabrics, other than (1) embroidery in the piece in strips or in motifs, and (ii) fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials- (a) manmade fabrics, not subject-_ ed to any process 40 seven and a half per cent ad valorem plus rupees two per square metre  45 seven and a half per cent ad valorem plus rupees two per square metre"  (b) man-made fabrics, subjected to the process of bleaching dyeing, printing, shrink-proofing, tentering, healsetting, crease resistant processing or any other process or any two or  more of these processes 5 (1) every central act as in force at any time during the period commencing with the appointed day and ending with the day immediately preceding the date of commencement of this act, and providing/for or relating to the levy of duties of excise on-spe~ial provisions as to duties of excise on cottoll (a) "cloth", "cotton cloth" or, as the case may be, "cotton fabrics"; 5 fahri~s wfjol1en (b) "woollen fabrics"; (c) "rayon or artificial silk fabrics" or as the case may be, "man-made fabrics", f8bri~s man-made fabrics, etc  during a certain past period and validation shall have and shall be deemed to have always had effect during the said period as if-10 (i) such "cloth", "cotton cloth" or, as the case may be, "cotton fabrics" comprised, for the purposes of the duty leviable under that act,-(a) a sub-item covering such "cloth" "cotton cloth" or "cotton fabrics" not subjected to any process mentioned in sub is clause (v) of clause (f> of section 2 of the central excises act as amended by this act; and 20 (b) a sub-item covering such "cloth", "cotton cloth" or "cotton fabrics" subjected to any such process or any two or more such processes, and the rate of duty specified in such act with respect to such "cloth", "cotton cloth" or "cotton fabrics" had been specified separately with respect to each of the aforementioned sub-items thereof; (ii) such woollen fabrics comprised for the purposes of duty leviable under that act-2s (a) a sub-item covering such woollen fabrics not subjected to any process mentioned in sub-clause (vi) of clause (f) of section 2 of the central exoises act as amended by this act; and (b) p subitem covering such woollen fabrics subjected to 30 any such process or any two or more such processes, and the rate of duty specified in such act with respect to such woollen fabrics had been specified separately with respect to each of the aforementioned sub-items thereof; (iii) such "rayon or artificial silk fabrics" or "man-made fabrics" 35 comprised for the purposes of duty leviable under that act- (ai) a subitem covering such "rayon or artificial silk fabrics" or "man-made fabrics" not wbjected to any process mentioned in sub-clause (vii) of clause (/) of section 2 of the ·central hebes act as amended by this act; and (b) a sub-item covering such "rayon or artificial silk fabrics" or "man-made fabrics" subjected to any such process or any two or more such processes, 5 and the rate of duty specified in such act with respect to such "rayon or artificial silk fabrics" and "man-made fabrics" had been specified separately with respect to each of the aforementioned subitems thereof; and 10 (iv) the amendments to clause <f) of section 2 of the central excises act made by section 2 had been in force at all relevant times subject to the modifications that the reference therein-(a) to the "goods comprised in item no 19 i of thp first schedule" shall be construed ils a reference to such "cloth", "cotton cloth" or, as the case may be, "cotton fabrics"; '(b) to the ccgoods comprised in item no 21(1) of the first 15 schedule" shall be construed as a' reference to woollen fabrics; (c) to the ugoods comprised in item no 22(1) of the first schedule" shall be construed as a reference to such "rayon or artificial shk fabrics" or, as the case may be, uman-made fabrics"; anc:~ subject to such further modifications as the context may require 20 (2) any rule or notification or any action, or thing made, issued, taken or done or purporting to have been made, issued, taken or done under a central act referre<i to in sub-section (1) before the date of commencement of this act, with respect to or in relation ,!o the levy of duties of excise on-2s (a) iccloth", ucotton cloth" or, as the case may be, ucotton fabrics"; (b) "woollen fabrics"; (e) "rayon or artificial silk fabrics" or, as the case may be, umanmade fabrics" 30 ,hatj for all nurposes be deemed to be and to have always been as validly and effectively made, issued, taken or done as if the provisions of this section had been in force at all material times and accordingly notwithstanding any judgment, decree or order of any court, tribunal or other authority-35 (a) all duties of excise levied, assessed or collected or purported to have been levied, assessed or collected, before the commencement of this act on-(i) ucloth", "cotton cloth" and "cotton fabrics" subjected to any process; 40 (ii) "woollen fabrics" subjected to any process; (iii) urayon or artificial silk fabrics" and "man-made fabrics" subjected to any process, under any such central act shall be deemed to be, and shall be deemed always to have been, as validly levied, assessed or collected 45 as if the provisions of this section had been in force on and from th~ appointed day; (b) no suit or other proceeding shall be maintained or continued in any court for the refund of, and no enforcement shall be made by any court of any decree or· order directing the refund of, any such duties of excise which have been collected and which would have been validly couected if the provisions of this section had been s in force on and from the appointed day; (c) refunds shall be made of all such duties of excise which have been collected but which would not have been so collected if the provisions of this section had been in force on and from the appointed day; and 10 (d) recoveries shall be made of all such duties of excise which have not been collected or, as the case may be, which have been refunded but which would have been collected or, as the case may be, would not have been refunded if the provisions of this section had been in force on and from the appointed day is (3) for- the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if this section had not come into force 20 explanation-in this section-(a) "appointed day", in relation to-(i) cotton fabrics, means the 1st day of january, 1949; (ii) man-made fabrics, means the 28th day of february, 1954; and (iii) woonen fabrics, means the 1st day of march, 1955; tls (b) "central act" includes any 'provision, in a bill introduced in the house of the people, in respect of which a declaration was made under section 3 of the provisional collection of taxes act, 1931; 160fl931'1 (c) "duties of excise" means duties of excise levied under any 30 central act whether as such or as additional duties of excise or auxiliary duties of excise or special duties of excise or by any other name  statement of objects and reasonscentral excise duty was levied for the first time on cotton fabrics in 1949, on man-made fabrics (rayon or artificial silk fabrics) in 1954 and on woollen fabrics in 1955 from the very early stages of the textile tariff, with a view to achieving progression in the rate structure and to aligning excise control with the demands of different producing sectors, duties have been levied not only on grey fabrics but also at the stage of processing such as bleaching, dyeing and printing ' i 2 in its judgment dated 24th january 1979 in the real honest textiles and others vs union of india (special civil appl1cations no 1552 etc of 1978), the gujarat high court has held that the term "fabric" as used in the tariff description "cotton fabric" would refer to something that is woven; hence it can relate only to cloth in the grey stage; processing of the grey cloth either by bleaching, dyeing or pi;inting does not amount to manufacturing and both before and after processing' it remains a fabric falling within the same item of central excise tariff (item 19-cotton fabric, of the first schedule to the central excises and salt act) the court arrived at a similar conclusion with respect to man-made fabrics falling under item no 22 of the same schedule the court observed that processing was an excisable activity covered by the residual tariff item no 68 of the said schedule 3 after the pronouncement ot the above judgment, a number of writ petitions by other parties agitating similar points have been filed in different high courts if these high courts deliver similar judgments,' a considerable amount of revenue running into several crores of rupees may become refundable an appeal against the judgment of the gujarat high court is pending in the supreme court 4 the judgment of the gujarat high court completely upsets the arrangement regarding levy of excise duties on textile fabrics which has been followed for several years and it will have the effect of disturbing the balance evolved between different sectors of the textile industry besides putting large amounts of revenue at stake in so far as past assessments are concerned, refund~ ot duties whose incidence would, in the normal course oj business, have been passed on to consumers, would only mean fortuitous gains, to the excise assessees 5 the same problem which has arisen in the case of cotton fabrics and man-made fabrics as a result of the judgment ot the gujarat high couri may arise in the case of woollen fabrics as well 6 it is, therefore, proposed to amend the central excises and salt act, 1944 and the additional duties of excise (goods of special importance) act, 1957 (which also provides fur duties of excise on the aforementioned fabrics) to overcome the difficulty which has arisen as a result of the judgment of the gujarat high court it is also proposed to validate the levies which have been made in the past in respect of these fabrics 7 the bill seeks to achieve the above objects new delhi; the 14th may, 1979 satish agarwal  extracts from the central excises and salt act, 1944l>eftnitions (1 of 1944) - - - - - ' 2 in this act unless there is anything repugnant in the mbject or context,-- - - - - - - (f> "manufacture " includes any process incidental or ancillary to the completion of a manufactured productj and - - - - -  the first schedule (see section 3)-------_---__  ---------------item no description of goods (3) - - rate of duty -------_____ 0 ____ 00_- ____ _ (1) (2) - - - -  19 cotton fabrics-j , ',' "cotton fabrics" means all varieties of fabrics manufactured either wholly or partly from cotton and includes dhoties, sarees, chadders, bed-sheets, bed-spreads, counter-panes, table-olot~, embroidery in the piece, in strips or in motifs and fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials, if (i) in such fabrics cotton predominates in weight, or (ii) such fabrics contain more than 40 per cent by weight of cotton and 50 per cent or more by weight of non-cellulosic fibres or yam or both: provided that in the case of embroidery in the piece, in strips, or in motifs and fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials, slllch predominance or percentages, as the case may: be, shall be in relation to the base fabrics which are i embroidered or impregnated, coated or twenty j;>er cent ad valorem ~am1na'ted, as the case may bel cotton fabrics other than (i) embroidery in the piece, in strips or in mo_ tifs, and (ii) fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artifi  gis! plastic materials - - - - - explanation i-"base fabrics" means fabrics falling under sub-item i of this item which are subjected to the process of embroidery or which  are impregnated, coated or laminated with preparations of cellulose deri-- -vatives or of other plastic materials explanation ii-where two or more of the f~llowing fibres, that is to , say, (a) man-made fibre of cellulosic origin; (b) cotton; (c) wool; (d) silk (including silk noil) ; (e) jute (including bimlipatam jute or mesta fibre); (f) man-made fibre of non-cell'ulosic origin; (g) flax; (h) ramie, in any fabric are equal in weight, then, such one ot those fibres the pre-(iaminance ot which would render such fabric fall under that item (here-·after in this explanation referred to as the applicable item) among the items nos 19,20,21,22, 22a and 22aa, which, read with the relevant notifi- cation, if any~ for the time being in force issued under the central excise rules, 1944, involves the highest amount of duty, shall be deemed to be predominant in such  fabric· and accordingly such fabric ;shall be deemed to fall under the applicable item erplanation iii __ this item does not include floor coverings, falling under item no 2,2g 21 woollen fabrics--,"woollen fabrics" means all varieties of fabrics in which wool predominates in weight or which contain more than 30 per cent of wool and 50 per cent or more of non-cellulosic fibre or y~ or both: provided that in the case of embroidery in the piece, in strips or in motifs, such predominance or percentages, as the case may be, shall be in 1'e1ation to the base fabrics which are embrotd&m~ twelve per cent   ad t1azorem (1) woollen fabrics, other than embroidttry in the piece, in strips or in motifs - /    - explanation i-"base fabrics" means fabrics falling under sub-ite;n: (1) of this item which are subjected to the process_ of embroidery, explanation ii-explanation ii under item no 19 shan, 80 far 88-may be, apply m relation to this item as it applies in relation to that item explanation iii-this item does not include fioor coverings, falling under item no 22g  22 man-made fabrics-"'man-made fabrics" means all varieties of fabrics manufactured either wholly or partly from man-made fibres or yarn and includes embroidery in the piece, in strips or in motifs and fabrics impregnated, coated or laminated with prepa,:-ations of cellulose derivatives or 01 other artificial plastic materials, in each of which man-made (i) cellulosic fibre or yarn, or (ii) non-cellulosic fibre or predominates in weight: provided that in the case of embroidery in the piece, in strips or in motifs and fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials, such predominance shall be in relation to the base fabrics which are embroidered or impregnated, coated or laminated, as the case may be-twenty per cent ad'~ , valorem plus rupees five per square metre (1) man-made fabrics other than (i) embroidery in the piece, in strips or in motifs, and (ii) fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials - - - - - explanation i-"base fabrics" means fabrics falling under sub-item (1) of this item which are subjected to the process of embroidery or which are impregnated, coated or laminated with preparaticms bf cellulose derivatives or of other plastic materials -explanation ii-this item does not include glass fabrics or fabrics" falling under item no 19 or item no 21 explanation iii-erplanation ii under item no 19 shall, 80 far 88: may be, apply in relation to this item as it applies in relation to that item e~lanation iv-this item does not include fioor coverings, falling;,~ under item no 22g - - - - - -  - (58 of 1957) - - the -first schedule [see section 3 (1)] description of goods rate of additional duty item no in the first schedule to the central excises and salt act 1944 (3) --- ---------(1) (2) 19 cotton fabrics-five per cent ad valo1'em l cotton fabrics other than (i) embroidery, in the piece, id strips or in motifs, and (ii) fabrics impregnated, coated or laminated with preparations of cellulose derivatives other artificial plastic materials or of - - - - 21 woollen fabrics-| five     | per                  | cent    ||----------|----------------------|----------|| ad:      |                      |          || valorem |                      |          || (1)      |                      |          || woollen  |                      |          || fabric~, |                      |          || other    | than                 | em-      || broidery |                      |          || in       | the piece, in strips | or       || tifs    |                      |          || -        |                      |          || -        |                      |          || -        |                      |          || -        |                      |          || -        |                      |          |22 man-made fabrics-seven and' a half per cent ad valo-· rem plus two rupees per square: metre (1) man-made fabrics other than (i) embroidery, in the piece, in strips or in motifs, and (ii) fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other arl!ficial plastic materials - - - - r '''_  \ ~,~  a bulfurtber to amend the central excises and salt act, 1944, and the additional duties of excise (goods of special importance) act, 1957   (shrl sctish agcmocl miftibter of state in the minist11l of finance) 