Excise rebate notification construed without requiring continuous factory existence in each preceding year; alleged alternative bar also failed.

Notification No. 108/78-C.E. was construed as not requiring a factory to have been in existence and producing sugar throughout every preceding year as an absolute condition for rebate; where the assessee otherwise satisfied the notification, commencement of production after the start of one or more preceding years did not defeat the benefit. The alleged disqualification under Notification No. 35/76 also failed because it was raised only in review and was not supported by particulars showing how the earlier notification applied or how clause 6 of Notification No. 108/78-C.E. was attracted. The rebate claims were therefore upheld and the departmental review notices failed.

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Issues: (i) whether rebate of excise duty under Notification No. 108/78-C.E. dated 28-4-1978 could be denied on the ground that the factory was not in existence during all the preceding years mentioned in the notification; (ii) whether benefit of Notification No. 108/78-C.E. was barred by the alleged applicability of Notification No. 35/76 dated 25-2-1976.

Issue (i): whether rebate of excise duty under Notification No. 108/78-C.E. dated 28-4-1978 could be denied on the ground that the factory was not in existence during all the preceding years mentioned in the notification

Analysis: The notification was construed in the light of the earlier judicial interpretation of a similar exemption provision. The decisive consideration was that the notification did not require the factory to have been in existence and to have produced sugar in each of the preceding years as an absolute condition for availing the benefit. If the assessee otherwise satisfied the notification, the mere fact that production had commenced after the start of one or more of the preceding years did not justify denial of the rebate.

Conclusion: The assessee could not be denied the benefit of Notification No. 108/78-C.E. merely because the factory was not in existence in all the preceding years.

Issue (ii): whether benefit of Notification No. 108/78-C.E. was barred by the alleged applicability of Notification No. 35/76 dated 25-2-1976

Analysis: The alleged bar was raised only in review proceedings and had not been established before the lower authorities. No particulars were furnished to show how the assessee satisfied the requirements of the earlier notification or how clause 6 of Notification No. 108/78-C.E. was attracted. In the absence of such material, the proposed disqualification could not be accepted.

Conclusion: The alleged bar under Notification No. 35/76 dated 25-2-1976 was not made out against the assessee.

Final Conclusion: The orders allowing the rebate claims were upheld and the departmental review notices failed.

Ratio Decidendi: An exemption notification cannot be narrowly construed to import an unstated requirement of continuous existence or production in each preceding year, and a denial of benefit on a different disqualifying ground must be supported by pleaded and established particulars.

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