The Jute Manufacturers Cess Act 1983

The Jute  Manufacturers Cess Act 1983 was enacted with a view to facilitate the development and production of jute manufacturing. It provided for an excise duty on jute manufacturers which was levied as a cess. Jute manufacture in this act means any item which contains more than fifty percent of jute and also has to be specified in the schedule appended to the act. Jute is also meant to include Bimlipatam jute or mesta fibre of any sort by weight of the total fibre content and in the production of which any process is ordinarily carried out with the aid of power. The act came into force on 1st may 1984.

 The Jute Manufacturers Development Council which  was initially set up as a development council  in the year 1976 but under the Industries Development and Regulation Act 1951. Subsequently, it was set up as a statutory body under the Jute Manufacturers Cess act 1983. The development council was set up with the aim of undertaking promotional activities for the development of the jute industry. The functions of the Council are enumerated under section 7 of the Act.  In order that such activities can be swiftly undertaken, the council receives grants from the Consolidated fund of India. The cess collected by the Central Government under this act is thus transferred to the Consolidated Fund of India.

Under section 3 the cess is collected in accordance with column 2 and 3 of the second schedule appended to the act. The central Government has to notify the rates not exceeding those specified in the second schedule to the act. It is also specified that until such rates are notified, the cess has to be levied in accordance with column 4 of the second schedule. Under section 5 of the act, the Central Government is empowered to call upon any producer or manufacturer of jute or jute products to give any statistical or other information if called upon to do so for the purposes of the act. Under section 6 of the act , the Central Government  is empowered to frame rules in order to give effect to the provisions of the act. The rules so framed are to be laid down before the Parliament. The rules were framed by the Ministry of Commerce, Department of Textiles on 15th Sept 1984.  The cess collections were found inadequate to  meet all the developmental and promotional activities. It was proposed that the cess on the articles of jute manufacturers should be levied on ad valorem basis instead of per tonne basis, because then  it could enable the collections to be at par with the increasing value of jute.  Thus the act was amended in 27th March 2002 with revised rates of cess. Reportedly, the state of affairs initially was so vulnerable that the members of the Development council were not even getting their salaries. Under the amendment, the maximum rate at which the excise duty ought to be collected by the central government for articles like carpet backing, hessian, sacking, Japanese rice bags or any other article of jute manufacture is two percent on ad valorem basis.

This act was dealt by the Calcutta High Court on 9th July, 1985 in the case of Delta Jute And Industries Limited V. Collector of Central Excise.the facts of the case were such that  under a scheme framed by the government of India , 100 percent export oriented units were given concessions in payment of excise duty if the conditions mentioned in the scheme were complied with. The petitioners in their writ petition contended that since the Jute Act provided for collection and levy of excise duty , they are entitled to exemption under the scheme formulated by the Government of India. The court rejected their contention and observed that the avowed purpose of the act is not to impose levy but to provide adequate funds for the activities of the Development Council.

by Ayeesha Mukherjee.