Nil-production years must be excluded from average sugar production under the exemption notification's express wording.

An exemption notification on sugar rebate required average production to be computed by reference to the corresponding period in each of the preceding three sugar years, but any year in which production during the relevant May-September period was nil had to be ignored. The commentary explains that the amended wording was materially different from the earlier notification and made the express exclusion of nil-production years mandatory, so those years could not be included in the average at all. On that reading, the rebate calculation was to proceed only on the basis of years with actual production, and the Revenue's method was upheld.

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Issues: Whether, under Notification No. 132/82-C.E. dated 21-4-1982, the average production of sugar for the preceding three sugar years had to be computed by dividing the total production by three or by ignoring the years in which there was no production during the relevant May-September period.

Analysis: The notification defined "average production" with reference to the corresponding period of each of the preceding three sugar years and further provided that where production during the relevant period in any of those years was nil, that year was to be ignored while determining the average. The wording of the new notification was materially different from the earlier notification considered in prior cases, and the altered language showed that the period-wise nil production years were not to be included in the computation at all. Reading the clause otherwise would defeat the purpose of the provision and render the express exclusion of nil-production years ineffective.

Conclusion: The nil-production years had to be excluded from the computation, and the average production was to be worked out only on the basis of the year in which production had actually occurred. The assessee's contention was rejected and the Revenue's method was upheld.

Final Conclusion: The duty rebate under the notification was to be calculated by excluding the nil-production years from the average, leaving the Assistant Collector's computation intact.

Ratio Decidendi: Where an exemption notification expressly directs that sugar years with nil production during the specified relevant period shall be ignored, those years must be excluded entirely from the average-production calculation, even if only one preceding year remains for the computation.

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