Additional excise duty under sugar export law applies only to a proven shortfall against the factory's export quota.

Additional excise duty under Section 7(1) of the Sugar Export Promotion Act, 1958 is attracted only where sugar delivered to the export agency falls short of the export quota fixed for the factory. Where the manufacturer has delivered the requisitioned quantity and the record shows that the exported quantity exceeded the quota, there is no proven shortage and no basis for levy. On the facts stated, the additional excise duty was not sustainable because the statutory condition for charging duty on a shortfall was absent.

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Issues: Whether additional excise duty under Section 7(1) of the Sugar Export Promotion Act, 1958 could be levied when the manufacturer had supplied sugar to the export agency and, on the department's own showing, the quantity exported exceeded the export quota fixed for the factory.

Analysis: Under Section 6(1) of the Sugar Export Promotion Act, 1958, a sugar manufacturer was required to deliver sugar to the export agency from time to time, within the aggregate limit of the export quota fixed for the factory. Section 7(1) created a levy only where sugar delivered fell short of the export quota, and the duty could then be collected only on the quantity corresponding to that shortfall. The record showed that the requisitioned quantity had been delivered to the export agency and exported, and even the department's case was that the quantity exported was higher than the quota fixed. In such a situation, there was no factual basis for treating any quantity as a shortage attracting the levy.

Conclusion: The levy of additional excise duty was not sustainable, and the assessee succeeded.

Ratio Decidendi: Additional excise duty under Section 7(1) of the Sugar Export Promotion Act, 1958 can be levied only when there is a proven shortfall between the quantity delivered and the export quota fixed for the factory.

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