Excise rebate eligibility for sugar factories survives partial base-year non-production when the governing notification does not require uninterrupted work.

A sugar factory was entitled to rebate under the 28 September 1972 excise notification because the proviso denying benefit applied only where the factory did not work during the base year at all. Partial non-production during some months did not defeat eligibility when production occurred in that year. The later notification of 4 October 1973 was held irrelevant to the entitlement, which had to be tested only under the governing 1972 notification. The refund demand was therefore unjustified, and the demand notice was quashed with costs.

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Issues: Whether a sugar factory that did not work during part of the base year was disentitled to excise rebate under the notification dated 28 September 1972, and whether the subsequent notification dated 4 October 1973 affected the petitioner's entitlement.

Analysis: The rebate notification issued under Rule 8(1) of the Central Excise Rules, 1944, granted exemption to eligible sugar factories and contained a proviso denying the benefit only to a factory which did not work during the base year. The petitioner had produced sugar during the base year, though not for the entire period. The proviso was therefore not attracted merely because production was absent for some months. The later notification dated 4 October 1973 was held to be irrelevant to the controversy, since the petitioner's entitlement had to be tested on the basis of the notification of 28 September 1972 alone.

Conclusion: The petitioner was entitled to the rebate and was not disentitled by partial non-production during the base year; the demand for refund was unjustified.

Final Conclusion: The demand notice was quashed and the petition succeeded with costs.

Ratio Decidendi: A rebate under an exemption notification cannot be denied on the ground that the factory did not work for the whole of the base year, if it did work during that base year and the governing notification does not require uninterrupted production throughout it.

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