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11. Mr. Salve, appearing for the appellants urged two contentions namely: (1) Jute yarn is not one of the products mentioned in heading 23 of the First Schedule to the Act though jute twine and jute rope are expressly mentioned. Indeed, a reading of heading 23 shows that in all other Sub-headings, yarn is specifically mentioned but in the case of sub-heading (2), yarn is omitted. This omission is deliberate and meaningful which is evident from the fact that the corresponding entry in the original First Schedule expressly included jute yam but when the First Schedule was substituted in 1956, jute yarn was specifically omitted. This has some meaning. It shows that jute yarn is outside the purview of the Act. In other words, an industry engaged in production of jute yarn is not within the purview of the Act. If so, cess under Section 9 cannot also be levied on such products. He submitted further that the cess cannot be levied on intermediate products but can be levied only on the final products.

13. On the other hand, Sri V.R. Reddy, learned First Additional Solicitor General supported the levy. He submitted that Section 9 empowers the Central Government to levy cess "on all goods manufactured or produced in any such scheduled industry as may be specified in this behalf by Central Government by notified order". Once jute textile industry is notified by Central Government, says he, all the goods manufactured or produced in such industry can be subjected to cess. He emphasises the fact that subheading 2 of heading 23 is inclusive in nature and must be deemed to take in jute yarn. According to him, the fact that jute yarn, which was specifically mentioned in the corresponding sub-heading before 1956 but is not found repeated in the present schedule is of little consequence. Learned Solicitor General did not concede that under Rules 9 and 49 Central Excise Rules, as they stood before they were amended in 1982, intermediate products captively consumed were not exigible to duty, In any event, he submitted, it is now well settled by decisions of this Court rendered under the provisions of Central Excise Act that duty can be levied on intermediate products as well even though captively consumed within the same factory or premises. The same principle applies to cess levied under Section 9 which is really a duty of excise, though levied and collected as a cess. According to him, Rule 3 of Jute Manufactures Rule is not a cess of legislation by reference but a case of mere reference and, therefore, the amendments and changes made in the Central Excise Act and the rules made thereunder arc equally applicable for the purpose of levy and collection of cess. Learned Additional Solicitor General also justified the levy of cess by weight. According to him, the Act does not prohibit such a levy. He brought to our notice that according to the schedule to the Central Excise Act, 1944 as well as the schedule to the Central Excise Tariff Act, 1985 excise duty is levied on jute and jute yarn only by weight. The same principle has been followed under the Act both for the sake of convenience and simplification. He submitted further that no material has been placed before the Court by the petitioners to show that the levy in question infringes the ceiling prescribed by the proviso to Sub-section 1 of Section 9.

15. It is then argued that if we arrive at the above conclusion on the basis of the language employed in Section 9, it would lead to an anomalous situation viz., while the jute yarn industry would not be within the purview of the Act (i.e., would not be subject to control and regulation provided by the Act) its products would be liable to pay cess under Section 9. This cannot be, says the learned Counsel. We arc not impressed. Firstly, it is not the case of any of the petitioners that any of them is engaged in the production of jute yarn alone. All of them arc engaged in manufacture of jute textile and are, therefore, scheduled industries. Jute yarn is an intermediate product for them. It is not even stated by the petitioners that there are any factories or industries engaged in production of jute yam alone. In the circumstances, this argument of Mr. Salve is hypothetical in nature and need not detain us. We cannot also accede to Mr. Salves argument that intermediate products of a scheduled industry cannot be subjected to cess on the ground that it would amount to multi-stage levy Section 9 speaks of levy on all goods manufactured or produced in a scheduled industry. Jute yarn is goods known to market. Therefore, they are goods manufactured in a scheduled industry. The fact that such yarn is captively consumed in the manufacture of jute textile is of no relevance. In fact, this question is concluded by the decision of this Court in J.K. Cotton Spinning & Weaving Mills v. Union of India , a decision rendered under the Central Excise and Salt Act. We think it convenient to deal with the contentions of Sri Ganesan at this stage, which we have set out herein before. His main contention is that Rule 3 of the Jute Cess Rules is a case of legislation by reference and that in such a case the provisions of the Central Excise Act and the rules made thereunder as they were obtaining on the date of making of Rule 3 continue in the same form, unaffected by subsequent amendments or changes in the Central Excise Act and Rules. He therefore, says that the amendment effected in 1982 in Rules 9 and 49 of Central Excise Rules is not available/or applicable to the levy and collected of cess under Section 9 of the Act. He also points out that the Act docs not confer upon the Central Government the power to make rules with retrospective effect. He relied upon the decision of this Court in Mahindra & Mahindra v. Union of India and Anr. . In our opinion, however, the very approach of the learned Counsel is based upon an incorrect premise. Firstly, it is not true to say that Rules 9 and 49 of the Central Excise Rules, as they stood before the 1982 amendment, did not permit levy of duty on captively consumed goods. A perusal of the decision of this Court in J.K. Cotton Spinning and Weaving Mills (supra) establishes the said fact. Different High Courts had taken different views. There was no decision by this Court. It is, therefore, wrong to assume that under the unamended rules, it was 'well settled' that duty could not be levied on captively consumed goods. The second and more important aspect is the nature of the cess in question. Though levied and collected as a cess, the imposition under Section 9 is a duty of excise. Section 9 says so in so many words. The explanation to Sub-section (1) of Section 9 defines the expression 'value' in practically the same terms as it is defined in the Central Excise Act. And Rule 3 of the Jute Cess Rules provides that except as otherwise provided in the said rules, the provisions of Central Excise Act, and the rules made thereunder "shall, so far as may be, apply in relation to the levy and collection of the cess as they apply in relation to the levy and collection of the duly of excise on Jute Manufactures under that Act". The language employed in this rule is significant. According to it, the provisions of the Central Excise Act and Rules arc applicable in the matter of levy and collection of the cess in the same manner they apply in relation to levy and collection of excise duty on Jute Manufactures. What do these words mean? Certainly they should mean something more than the words which fell for consideration in Mahindra and Mahindra. The facts of that case arc: Section 55 of Monopolies and Restrictive Trade Practices Act, 1969 provided that any person aggrieved by an order made by the Central Government or the Commission under Section 13 or under Section 37 may prefer an appeal to the Supreme Court on "one or more of the grounds specified in Section 100 of the CPC, 1908". On the date Monopolies & Restrictive Trade Practices Act_ was enacted, Section 100 CPC provided three grounds on which a second appeal lay, one of them being that the decision appealed against was contrary to law. However, by virtue of 1976 Amendment, Section 100 was substituted. Now, a second appeal lies only on one ground, namely in a case where the High Court is satisfied that the case involves a substantial question of law. The appellant filed an appeal under Section 55 on February 28, 1978, wherein the respondent raised an objection as to its maintainability on the ground that the appeal docs not involve a substantial question of law within the meaning of amended Section 100 CPC which was said to be applicable. The said objection was negatived by this Court holding that on a proper interpretation of Section 55, it must be held that the grounds specified in the then existing Section 1(x) CPC were incorporated therein and the substitution of the new Section 1(x) did not affect or restrict the grounds as incorporated in Section 55. This was so held on the basis of the well settled proposition that if a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those sections into the new Act just as if they had been actually written in it with the pen or printed in it, and, the moment you have those clauses in the later Act, you have no occasion to refer to the former Act at all (Per Lord Esher, M.R. in In/re Wood's Estate (1886) 31 Ch. D. 607/615).

16. But the language of Rule 3 of Jute Cess Rules is altogether different. It indicates a continuing applicability of the provisions of the Central Excise Act and the Rules. What was levied was a 'duty of excise' and it was to be levied and collected in accordance with the provisions of the Central Excise Act and the Rules. The effect is as if the words "for the time being in force" were there after the words "the provisions of Central Excise and Salt Act, 1944 (1 of 1944) and the Rules made thereunder" in Rule 3, We are, therefore, of the opinion that the amendment of Rule 9 and 49 made in 1982 (with retrospective effect from 1944) is equally applicable in the matter of levy and collection of cess under the Act. The contentions urged by Sri Ganesan arc accordingly rejected. In this view of the matter, it is not necessary to dwell upon the difference between cases where the provisions of another Act are incorporated by reference and cases where a mere reference is made to another Act a distinction pointed out in a recent decision of this Court in Bhatinda Improvement Trust v. Balwant Singh .