Exemption notification for excess sugar production construed by plain wording: slab rates apply to excess output, not average production.

An exemption notification granting rebate on sugar produced in excess of the average production of the corresponding period of the preceding five sugar years was construed according to its plain wording. The Court held that the slab expressions such as "upto 7.5%" applied to the excess production itself, not to average production, because the notification did not add the words "of average production" and that reading would distort the slab structure and leave part of the excess production outside the rebate scheme. The assessee's interpretation was accepted, and the incentive object of the notification was given full effect.

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Issues: Whether, under the sugar incentive exemption notification issued under Rule 8 of the Central Excise Rules, 1944, the slab percentages in clauses (a) to (d) were to be applied to excess production over average production or to the average production itself.

Analysis: The notification granted rebate on sugar produced in excess of the average production of the corresponding period of the preceding five sugar years. The slab language, reading "on excess production upto 7.5%" and similar expressions, was held to naturally refer to percentages of the excess production itself. The Court held that the notification could be given full effect on its plain words without adding the words "of average production", and that the rival construction would leave part of the excess production outside the rebate scheme and distort the slab structure.

Conclusion: The slabs had to be computed with reference to excess production, not average production, and the assessee's interpretation was accepted.

Ratio Decidendi: Where an exemption notification uses plain language granting rebate on "excess production", the Court must construe the slabs according to that wording and cannot add words that alter the statutory scheme or defeat the incentive object of the notification.

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