TaxTMI 
TaxTMI 
1985 (7) TMI 349
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....ection 50 of the Finance Act, 1982 (14 of 1982), the Central Government hereby exempts sugar, described in column (1) of the Table below and falling under sub-item (1) of Item No. 1 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), from so much of the duty of excise and special duty of excise leviable thereon as is specified in the corresponding entry in columns (2) and (3) of the said Table. TABLE Description of sugar  Duty of excise and special duty of excise Free sale sugar   Levy   sugar (1)  (2) (3) Sugar produced in a factory during the period commencing on the 1st day of May, 1982, and ending with the 30th day of September, 1982, which is in excess of the average production of the corresponding period of the preceding three sugar years. (Rupees per quintal)    40.00    24.50 *          *           *           * Explanation :- In th....
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.... would be May September of each year : however, we were given to understand that there was production only in the period May-July of the relevant years and therefore, only these have been mentioned. The production in May July of each year would also be the production in May-September of that year). On the basis of these figures, the "average production of the corresponding period of the preceding three sugar years" was 44.768.22+2,260 % 2, i.e. 23,514.11 quintals (the period May-July, 1980 during which there was no production being ignored, in terms of Explanation 3 to the notification). Therefore, the excess production in 1982 was 82,795.26 minus 23,514.11 or 59,281.15 quintals, on which the respondents were entitled to a "rebate" of Rs. 17,73,978.50. 4. As against this, according to the Assistant Collector, the respondents did not have any production of sugar during May-July, 1981, Therefore, both the periods May-July 1980 and May-July, 1981 had to be ignored in terms of Explanation 3, and the "average production of the corresponding period of the preceding three sugar years" was the same as the actual production in May-July, 1979, namely, 44,768.22 quintals. The net exce....
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....uring May, 1981; (2) The R.G. 1 production register for the month of May, 1981 showed that in May, 1981 only brown sugar was bagged, and the bagging had commenced on 1-5-1981 itself. Therefore, the entire amount of sugar, including brown sugar, must have been produced only in April, 1981 and in May, 1981 only bagging of the brown sugar was done. As such there was no production of sugar in May, 1981 on the basis of which the incentive could be given; (3) The Notification No. 132/82 no doubt stipulates that in computing the production of sugar the data as furnished in the form R.G. 1 shall be adopted. However, sugar is entered in the R.G. 1 register only when it is bagged, and the bagging depends upon convenience, labour and efficiency of the factory. It may even be postponed. If it is postponed, and production is allocated to the month in which the sugar is bagged, the real position would not be represented by the R.G. 1 register. 8. Shri Sachar, the learned representative of the Department who appeared before us, reiterated the above grounds. He also drew our attention to a notice issued by the respondents in which it has been stated that the factory was "finally clos....
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....is not disputed that the brown sugar which was bagged on or after 1-5-1981 was sugar within the meaning of the Tariff Item. 11. In the light of these facts and of the wording of Notification No. 132/82, the conclusions are clear. The respondents no doubt completed their crushing by 28-4-1981, but the process of manufacture of sugar continued thereafter and the bagging of 2260 quintals of sugar was done only in May 1981. For the purpose of Tariff Item 1 and of Notification No. 132/82, it was immaterial whether the sugar was white sugar or brown sugar. The Notification is very clear that in computing the production of sugar the data as furnished in the form R.G. 1 shall be adopted. A point was, no doubt, raised by Shri Sachar that the reliance on the data in the R.G. 1 form was prescribed only for computing the production of sugar from May to September,1982, and not for computing the production in the corresponding period of the preceding three sugar years. On a literal interpretation of the wording, this may be so. However, it appears to us that it could not be the intention, nor would it be correct, to adopt a different basis for computing the production of preceding years.....