1984 (6) TMI 258

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....s appeal coming up for orders upon perusing the records and upon hearing the arguments of Shri S K. Choudhury, Senior Departmental Representative for the appellant and upon hearing the arguments of Shri Natarajan, Advocate for the respondent, the Tribunal makes the following order: 3. By his order C. No. V/1/30/60/81 T. 3, dated 29-6-82, the Assistant Collector of Central Excise, Hosur Division, Hosur, directed M/s. Dharmapuri Cooperative Sugar Mills Limited, respondents herein, to debit an amount of Rs. 1,09,604.99 being excess payment of rebate for sugar manufactured by the respondent for the sugar year 1977-78 (incentive period May to September 1978), the rebate having been claimed in terms of Notification No. 107/78, dated 28-4-....

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....n as crushing is over, the quantum of sugar which would be entitled to the incentive under the scheme is determined; an amount equal to this quantum is straightaway credited to the Personal Ledger Account (PLA) of the concerned factory. The sugar which actually qualifies for the reduced rate of duty in terms of an exemption notification issued under Rule 8(1) of the Central Excise Rules, 1944-108/78 dated 28-4-78 in the present case-gets cleared at a future point of time; the amount of advance credited is placed at the disposal of the factory which is utilised for payment of duties of excise for other sugar or the same sugar, but all at the standard rates. He emphasised that at the time of actual clearance of sugar produced in excess and wh....

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....tory dated 5-6-78, a date by which the sugar produced would hardly have started out. We have perused the procedure set out in the Ministry of Finance letter referred to supra. This leaves no doubt in our minds that what is being given to a factory producing excess sugar over a base period is an advance credit. In doing so, the Government is not exercising any of the statutory functions under the Central Excise Act and the Rules thereunder, but an administrative, or may be a banking, function. When the relevant goods have not reached the stage of assessment in the sense that they are not being removed from the factory of production, the time and place of levy envisaged in Section 3 of the Act read with Rule 9 has not arisen. If there has bee....