Rebate under excise notification limited to duty actually levied and paid; exported sugar without duty could not claim exemption.

Rebate under Notification No. 108/78-C.E. was available only where the excess sugar had actually suffered excise duty. Because exported sugar was not subjected to actual assessment or levy, the notification could not be invoked for that quantity. The exemption was also confined to the duty actually levied and paid, not to the mere quantity of excess production. The HC therefore answered the reference against the assessee and confined relief to eligible excess production on which excise duty had in fact been levied.

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Issues: (i) Whether the benefit of Notification No. 108/78-C.E. was available in respect of excess sugar that was exported out of the country and not subjected to excise duty. (ii) Whether the quantum of exemption under the notification was to be determined by the quantity of excess sugar produced or by the actual duty levied and paid on such sugar.

Issue (i): Whether the benefit of Notification No. 108/78-C.E. was available in respect of excess sugar that was exported out of the country and not subjected to excise duty.

Analysis: The availability of rebate under the notification depended on the product being exigible to duty. Since a substantial part of the excess sugar had been exported and was not subjected to actual assessment or levy of excise duty, the notification could not be invoked for that quantity.

Conclusion: The benefit of the notification was not available for the exported sugar that had not suffered excise duty.

Issue (ii): Whether the quantum of exemption under the notification was to be determined by the quantity of excess sugar produced or by the actual duty levied and paid on such sugar.

Analysis: The notification operated only to the extent of the duty actually levied on the excess production. Mere excess production, without corresponding assessment and levy of duty, was insufficient to claim the rebate.

Conclusion: The quantum of exemption was limited to the actual duty levied and paid, and not to the mere quantity of excess production.

Final Conclusion: The reference was answered against the assessee, holding that rebate under the notification depended on actual excise duty liability and was confined to the duty actually levied on the eligible excess production.

Ratio Decidendi: A rebate notification tied to excise duty liability applies only where the goods have actually suffered assessment and levy of duty, and the quantum of exemption is confined to the duty so levied.

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