Average sugar production for excise rebate must be divided by five years, even when some years had nil output.

For central excise duty concession on sugar, average production under the relevant notification had to be computed over the full preceding five sugar years, even where production was nil in two of those years. The Tribunal followed earlier decisions settling that the total production for the five-year period must be divided by five, not by three, for the rebate calculation. The Department accepted that legal position and sought only verification of the production figures and recomputation. The claim was therefore to be recomputed on the five-year basis in favour of the assessee.

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Issues: Whether, for computing the average production for central excise duty concession on sugar under the relevant notification, the appellants' total production for the preceding five sugar years was to be divided by five or by three where production was nil in two of those years.

Analysis: The dispute concerned the method of calculating the average production for incentive rebate on sugar produced during October-November 1974. The Tribunal followed earlier decisions which had settled that the average had to be worked out on the basis of the full five-year period contemplated by the notification, notwithstanding nil production in some of the preceding years. The Department did not dispute the legal position and only sought verification of the production figures and recomputation of the rebate in accordance with that ratio.

Conclusion: The computation had to be made by dividing the total production of the preceding five sugar years by five, not by three, and the claim was to be recomputed accordingly in favour of the assessee.

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