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The Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 was enacted on December 6, 1978 with an intention to impose and collection of extra excise duties on some textiles as well as other textile commodities. The Act shall come into effect on October 4, 1978. Where the commodities of the specification provided in the Scheduled under Act and charged with excise duty according to the provisions of Central Excise Act, 1944 along with any other notification which is enforced and notified by the Central Government with regard to the duty which can be charged and are calculated to duty, shall be imposed and collected as excise duty which is equivalent to 15 % of the entire amount that can be charged on those commodities. But, such duty charged shall not be a notification that provides for immunity for granting credit or cutback of excise duty according to the provisions of Customs Tariff Act, 1975 that is previously paid for the raw material which is used to generate and produce such commodities. The excise duty pointed out earlier with regard to commodities described in the Schedule is charged supplementary to the excise duty on the commodities as per the Central Excise Act, 1944 or other legislation that is enforced and shall be collected for the benefit of the Central Government. Such proceeds are not disseminated between various States.

The stipulations provided under the Central Excise Act, 1944 and other rules made under the legislation added with the matters connected with refunds and exemptions from excise duties shall be applicable for the impositions and collection of excise duties chargeable for any commodity which apply for the imposition and collection of excise duties on such commodities by virtue of that legislation or rules. Under the Schedule to the Act, the terms ‘chapter’ and ‘heading’ refer to mean the ‘chapter’ or ‘heading’ as provided under the Schedule to Central Excise Tariff Act, 1985. To classify commodities described in the Schedule to the present Act, the rules of interpretation to comprehend the Schedule to the Central Excise Tariff Act, 1985 shall be relevant. The goods provided under the Schedule to the Additional Duties of Excise (Textiles and Textile Articles) Act of 1978 are silk, wool, interweaved or crocheted clothes, man-made attached fibres, cotton, terry toweling and natural fiber terry fabrics and synthetic yarn. Other commodities consist of embroidery in design, in the piece or in the carpet, tulles and other net fabrics excluding woven, crocheted fabrics or interweave lace in the piece and metalized fiber.

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The additional excise duty imposed on silk include levying of tax on raw silk, silk waste consisting of cocoons incompatible for rolling, yarn waste and garneted collection, silk yearn which is not put up for trade, fiber spun taken from silk waste, silk thread from silk waste, silk worm gut and woven fabrics of silk. Furthermore, the additional duty imposed on wool contains wool which is not carded or not combed, fatty, excellent or coarse animal hair which is not carded or combed, waste of fur, coarse animal hair, fiber waste, garneted reserve of wool, fiber of carded or combed wool which is not offered for trade, fiber of wool or fine animal hair or horse hair, bamboo fabrics of carded wool or carded fine animal hair.

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The Act repealed the Additional Duties of Excise (Textiles and Textile Articles) Ordinance, 1978. Hence, the Act is very comprehensive that gives clear reports on the textile or textile articles for which additional excise duty is to be paid. The people dealing with such an industry will undoubtedly provide very minute areas where tax is to be given. The Schedule to the Act with reference to the Schedule in the Central Excise Tariff Act, 1985 provides the list of items under the textile industry where dealer is obliged to pay additional excise duty.