Rebate under sugar excise notification allowed where nil-production years could not be excluded from the five-year average computation.

Rebate under Notification No. 146/74-C.E. depended on production during the corresponding period of the preceding five sugar years under rule 8 of the Central Excise Rules, 1944. The definition of "sugar year" covered 1 October to 30 September, and paragraph 4 regulated only the class of factories and the treatment of the preceding five sugar years; it did not permit exclusion of nil-production years when averaging the relevant October-November production. On the admitted figures, the petitioner's October-November 1974 production exceeded that average and its annual production also met paragraph 1(b), so rebate was available and the contrary orders could not stand.

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Issues: Whether the petitioner was entitled to rebate under Notification No. 146/74-C.E. on the sugar produced during 1 October 1974 to 30 November 1974, and whether the nil-production sugar years could be excluded while computing the average production for the relevant preceding five sugar years.

Analysis: The exemption operated under rule 8 of the Central Excise Rules, 1944 and turned on the production figures for the corresponding period of the preceding five sugar years. The definition of "sugar year" in the notification covered the full period from 1 October to 30 September, and paragraph 4 dealt only with the class of factories and the way the preceding five sugar years were to be treated for that purpose. It did not authorise exclusion of nil-production years while computing the average production of the relevant October-November period. On the admitted figures, the petitioner's production for October-November 1974 exceeded the average of the corresponding period of the preceding five sugar years, and its overall production for the year also satisfied the condition in paragraph 1(b).

Conclusion: The petitioner was entitled to rebate under paragraph 1(b) of Notification No. 146/74-C.E., and the contrary orders of the authorities could not be sustained.

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