Average sugar production under rebate notification excludes nil-production years and can be based on the remaining production year

Clause 3 of Notification No. 135/83-CE required average sugar production for rebate to be computed by ignoring any sugar year in which there was no production. The computation could validly proceed on the basis of the remaining production year or years, because the notification created a deeming method of averaging rather than a strict multi-year factual average. Years of nil production were therefore excluded from the averaging exercise, and the Department's method of calculating the rebate basis on the single year of actual production was upheld.

---

---

Issues: Whether, under Clause 3 of Notification No. 135/83-CE dated 30-4-1983, the average production of sugar for rebate had to be computed by taking only the sugar year in which production actually occurred, excluding the years of nil production.

Analysis: The relevant clause directed that years in which there was no production of sugar were to be ignored while determining the average production. The Court held that an average can be worked out even where one or more base years show zero production, because the notification creates a deeming basis for computation. The years of nil production were therefore not to be counted in the averaging exercise, even if that left only one production year for calculation.

Conclusion: The average production was correctly worked out on the basis of the one sugar year in which production occurred, and the Department's computation was upheld.

---