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21. Under Section 9(4), the Development Council may utilise the funds for making scientific and industrial research with reference to jute and jute products including jute yarn and also to promote improvements in design and quality with reference to the same and, therefore, the contention of the learned counsel that jute cess can be levied only on end-products and not on jute yarn cannot be accepted.

22. In the Fort William Co. Ltd. v. Inspector, Central Excise and Others - (1) 1979 Excise Law Times, J 23 - a similar question with regard to the validity of levy of cess on certain jute products including jute yarn under the Act arose for consideration. The petitioner therein, a public limited company, was engaged in the manufacture of jute products consisting of carpet backing, hessian sacking, bagging cloth including jute yarn and jute twine. With regard to the levy of cess under the Act on jute twine and yarn consumed within the factory for conversion into jute manufactures, the Central Government issued a clarification stating that jute twine and jute yarn consumed within the factory for manufacturing of jute goods though exempted from payment of Central Excise Duty were liable for levy of cess under the Jute Manufacturers Cess Rules, 1976. When the department required the petitioner therein to pay the cess on jute twine and jute yarn utilised for captive consumption within the factory, the petitioner challenged the said levy. On behalf of the petitioner therein, it was contended that under Section 9(1) of the Act, the Central Government had no competence or authority to levy cess on jute twines, thread, rope or yarn inasmuch as the said articles were not 'textiles' within the meanings of Item No. 23(2) of the First Schedule, and that the said articles were not included in the Explanations to the First Schedule either as components or intermediates required for the manufacture of Item No. 23.

23. The learned Judge held that the levy of cess under Section 9(1) was not restricted to textiles but on all goods manufactured or produced in the textile industry which is a scheduled industry, and that jute twine and rope were manufactured or produced in the petitioner's mill and, therefore, the Central Government was competent to impose cess on jute twine, yarn and rope, and that the Explanations to the First Schedule were only intended to exercise control over the industries which manufacture the components and intermediates, and that the Explanations were not relevant with regard to levy of cess under Section 10 of the Act. The learned Judge further held that the excise duty levied under the Central Excises and Salt Act and cess levied under Section 9(1) of the Industries (Development and Regulation) Act were quite different and they did not constitute the same thing, and merely because exemptions were granted with respect to excise duty under the Central Excises and Salt Act with regard to goods and articles, it could not be said that no cess could be levied with respect to those identical goods under a different enactment. The learned Judge further observed that the proviso to Section 9(1) and the Explanation thereto only fix the maximum limit of rate of such cess and the said limit was expressed in terms of the value of the goods, and that the fixation of the rate on the value of the goods on the basis of weight was not in conflict with the proviso, as the proviso could not control the main part of the section. With respect, we agree with the aforesaid view expressed by the learned Judge.