According to the new levy draft formula, Rs 1.50 lakh per month, per chamber, will be levied. The new arrangement was worked out recently in response to the two-day strike by textile processors last month. The new draft was recently discussed in a meeting between Kashiram Rana , textile minister, NK Singh, revenue secretary, DS Solanki, chairman, Central Board of Excise and Customs (CEBC), BP Verma, member excise board and a delegation of Federation of Mumbai Textile Processors and Merchants at New Delhi.

According to Dinesh Parekh, president of the Federation another meeting has been called next week to find a permanent solution to the problem of calculating leviable excise duty in Mumbai. The meeting will also finalise the new levy formula for which a separate notification will follow later, he said. But this move requires enactment, he added.

The Federation hadcalled a two-day strike against the harassment of excise officials by way of raids and seizure of accounts books. Thousands of processing and trading units in the region had observed a two-day bandh on June 24 and 25.

The crux of the issue is very simple, assert the agitators. After several representations by the processing community, the former CEBC chairman had agreed on July 28, 1997 that the excise duty rate of 12.8 per cent on total value of processed fabrics was very harsh, as it was tantamount to a levy of Rs 5.0 lakh per working chamber per month. It was termed to be an unjust levy as the processors undertake jobwork on slim margins.

After much negotiation it was agreed that a levy of Rs 1.50 lakh per chamber per month at a flat rate would be levied. The rate was accepted to be reasonable by both the parties and was decided that the excise department will comply the formula.

Strangely the excise commissionerate in Mumbai refused to implement the agreed mechanism while other states like Gujarat,Andhra Pradesh, Punjab and others accepted it.