1985 (12) TMI 153 - AT - Central Excise

Tribunal rules on sugar production for duty concession

The Tribunal held that for the purpose of calculating the average production of sugar for Central Excise Duty Concession under Exemption Notification No. ... Sugar - Excess production rebate Issues Involved:1. Method of calculation of average production of sugar for Central Excise Duty Concession.2. Interpretation of Exemption Notification No. 132/82-C.E., dated 21-4-1982.3. Applicability of previous legal precedents.Detailed Analysis:1. Method of Calculation of Average Production of Sugar for Central Excise Duty Concession:The primary issue in this case revolves around the method of calculating the average production of sugar for the purpose of granting the Central Excise Duty Concession under Exemption Notification No. 132/82-C.E., dated 21-4-1982. The respondent factory did not produce sugar during the periods of May-September in the sugar years 1978-79 and 1979-80. The Assistant Collector determined that only the production during May-September of 1980-81 should be considered for calculating the average production, effectively dividing the production by 1. The Collector (Appeals) disagreed, arguing that the production should be divided by 3, which would result in a smaller average production and a larger figure of excess production for the year 1981-82, thereby qualifying for a higher duty rebate.2. Interpretation of Exemption Notification No. 132/82-C.E., dated 21-4-1982:The Tribunal examined the specific language of the notification, particularly clause 3, which states, 'where during the period mentioned in column (1) of the said Table, production in any of the preceding three sugar years was nil, the average production shall be determined as under.' The Tribunal emphasized that the language of the notification requires that if there was no production during the specified period in any of the preceding three sugar years, such years must be ignored entirely in calculating the average production. This interpretation was crucial in determining that the Assistant Collector's method of dividing by 1 was correct, as opposed to the Collector (Appeals)' method of dividing by 3.3. Applicability of Previous Legal Precedents:The respondents relied on several previous legal authorities, including cases reported in 1982 E.L.T. 866 (Bombay), 1983-E.L.T. 484 (Mad.), and 1980 E.L.T. 10 (Madras). However, the Tribunal found that the first two authorities were not relevant as they pertained to a different notification (Exemption Notification No. 257/76-C.E., dated 30-9-1976) and addressed whether nil production disqualified a factory from earning the duty rebate, which was not the issue in the current case. The more relevant authorities (1983 E.L.T. 484 (Mad.) and 1980 E.L.T. 10 (Madras)) dealt with Exemption Notification No. 146/74-C.E., dated 12-10-1974, which had different wording. The Tribunal noted that the new notification (No. 132/82-C.E.) had addressed the deficiencies in the old notification by explicitly stating that years with nil production during the specified period should be ignored.Conclusion:The Tribunal concluded that the Assistant Collector's interpretation of the notification was correct. Since the respondent factory did not produce any sugar during May-September periods of 1978-79 and 1979-80, those years should be ignored, and only the production of 1980-81 should be considered for calculating the average production. Consequently, the appeal was allowed, the order of the Collector (Appeals) was set aside, and the order-in-original of the Assistant Collector was restored.