Special excise duty scheme for new sugar factories continued to apply despite later levy-sugar rate reductions.

Notification No. 35/76-C.E. created a self-contained incentive scheme for new sugar factories commencing production on or after 1 April 1974, granting a larger free-sale quota and fixing excise duty and additional excise duty on the levy-sugar component at the rates specified in that notification. Its proviso excluded the earlier general levy-sugar notification from applying to factories covered by the scheme. Later notifications reducing duty on levy sugar applied only generally and did not expressly supersede or amend Notification No. 35/76-C.E. The special rate under the 1976 notification therefore continued to govern factories within the scheme, and the petitioner could not claim the later reduced levy-sugar rates.

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Issues: Whether Notification No. 35/76-C.E. governing new sugar factories fixed a continuing rate of excise duty and additional excise duty on the levy-sugar component, and whether the subsequent notifications reducing duty on levy sugar altered the liability under that notification.

Analysis: Notification No. 35/76-C.E. formed part of a consolidated incentive scheme for sugar factories commencing production on or after 1 April 1974. It granted a larger free-sale quota and, for the quantity covered by the scheme, prescribed duty at 15% and 5% on the price determined for levy sugar. The notification was self-contained, and its proviso excluded the earlier levy-sugar notification from applying to factories covered by it. The subsequent notifications relied upon by the petitioner dealt with levy sugar generally and modified the rate applicable to other factories, but none of them referred to or amended Notification No. 35/76-C.E. or the special scheme for new units. In the absence of any express supersession or modification, the rate fixed by Notification No. 35/76-C.E. continued to govern the petitioner.

Conclusion: The petitioner was not entitled to the benefit of the subsequent reduced levy-sugar rates under the special scheme and the impugned demand was valid.

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