TaxTMI 
TaxTMI 
1987 (5) TMI 140
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....gar and damaged sugar containing more than 90% sugar content which was later re-processed by the appellants' company. In the course of such reprocessing there were certain losses of sugar obtained. The Department, therefore, issued show cause notices to the appellants asking them as to why incentive rebate allowed by way of credit in the PLA for the quantities lost during re-processing are debited in their personal ledger account. In the Order-in-Original, the Assistant Collector held that the aforestated excess of incentive rebate allowed was recoverable and should be debited in the PLA of the appellants' company. When the party went in appeal before the Appellate Collector, the Assistant Collector's order was confirmed. It is against this order of the Appellate Collector that the appellants have come up before us. 3. Shri V. Lakshmikumaran, advocate, appeared on behalf of the appellants and submits first of all that the period for which the rebate is actually claimed is for sugar season 1971-72 to 1974-75 and the show cause notices which were issued on the 16th July 1979 and 18th September 1979 were clearly barred by limitation. When asked about the precise date of adjustme....
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....oduction and that the dirty sugar, being non-excisable, would not be entitled to any rebate or duty on excess production. Shri Sachar also submits that the Appellate Collector rightly relied on the decision in the case of Rohtas Industries Limited, Dalmianagar : 1972 TLR 2309 in which it was held that sugar produced in 1972-73 season which was re-processed in 1974 could not be treated as manufactured in 1972-73. 7. We have carefully considered the facts of the case and submissions made before us. The first point on which a decision is necessary is whether the orders of the Department relating to the making of adjustment in the personal ledger account with a view to recover excess incentive rebate allowed is barred by limitation. The grant of advance credit of admissible rebate for duty has been allowed by the Department as an extra legal concession. Actually at the time when such credit is allowed in the PLA there has been no payment of duty and therefore, strictly speaking, it cannot be said that the credit allowed is a refund of duties paid, because, after all, refund can only be of actual payment and not of future payment. On the other hand, when an extra legal concession ....
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....able to persuade myself to agree with the conclusion reached in that order it has become necessary for me to record a separate order. 15. In respect of their production during the years 1971-72 to 1974-75 the appellants, M/s. South India Sugar Ltd. had been granted incentive rebate under the notifications providing therefor, the rebate having been granted in respect of brown sugar and damaged sugar also produced during the respective years. Subsequently two show cause notices, dated 16-7-1979 and 18-9-1979 were issued to the appellants calling upon them to show 'cause why the incentive rebate earlier granted should not be reduced to the extent indicated in the notices and the balance recovered from them. This was on the basis that subsequent to the close of the respective years the appellants had processed the brown/damaged sugar to produce white sugar and in that process of re-processing the quantities as indicated in the show cause notices had been lost and therefore the rebate granted in respect of the quantities so lost was liable to be repaid. The appellants resisted the demand. The Assistant Collector under order, dated 30-11-1980 over-Rule d their defence and directed ....
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.... taken into consideration if such defective, damaged or brown sugar had already been included in quantifying sugar produced for the purpose of granting rebate. That would clearly establish that damaged or brown sugar would be sugar eligible for rebate. Hence the ratio of the above decision would not apply to our case. The other case of Rohtas Industries Ltd. only laid down that sugar produced in one season and later reprocessed in the next season cannot be treated as sugar manufactured in the next season. Therefore that would also not govern the present issue. 18. Shri Lakshmikumaran on the other hand relies on the words in Sub-clause (c) of 2nd proviso to notification No. 203/72, dated 28-9-1972 and the corresponding proviso in notification No. 189/73, dated 4-10-1973. He points out that under the said provisos it has been specifically stipulated that any sugar obtained by reprocessing of defective, damaged or brown sugar should not be again taken into account for claiming rebate, if the said defective, damaged or brown sugar has already been included in the quantity of sugar produced for deciding the quantum of excess production. He, therefore, contends that while it is permissi....