The Hindu Business Line : Cement unit directed to pay cess, excise duty on limestone, dolomite

Chennai, Oct. 27 Inasmuch as levy of cess and excise duty on limestone and dolomite was intended to build a labour welfare fund, these imposts should be honoured by units having mining leases, the Madurai Bench of Madras High Court has held.

Rejecting contentions of India Cements Ltd challenging orders of Welfare & Cess Commissioner, Government of India, Hyderabad, Mr Justice K. Chandru directed the petitioner to comply with impugned orders.

The company has mining lease in Kudankulam village, and the respondent (Welfare & Cess Commissioner), acting under Welfare Fund Act,1972, demanded it to pay Rs 29,33,430, together with interest, as cess and excise.

On behalf of the company, it was submitted that only when limestone was quarried and taken for captive consumption or sold or otherwise disposed of, these duties were payable.

Arrangement

In the present case, in view of arrangement with Government in terms of lease deed, petitioner had quarried more than requirement, and therefore, it would be inequitable to pay cess on non-royalty paid limestone. The Judge ruled that this argument overlooked explanation appended to Section 3 of Welfare Act.

It was not difficulties of petitioner that had to be taken into account. The further contention that only when limestone was sold, their liability arose was contrary to provisions of Act.

Quoting a judgment of the apex court in Hindustan Steel Works Construction Ltd vs Limestone & Dolomite Mines Welfare & Cess Commissioner, the Judge held that orders passed by respondent did not suffer from any infirmity or illegality. The petition stood dismissed.

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