TaxTMI 
TaxTMI 
1978 (2) TMI 104
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....mpt from the levy of excise duty, sugar produced during certain periods in a year to the extent that it exceeded of the quantity of sugar produced during the corresponding periods of the previous year. By a notification dated 13-10-1971 issued under Rule 5 of the Central Excise Rules, the Government announced a rebate of excise duty at the rate of Rs. 17/- per quintal of sugar produced by any factory during the period 1-10-1971 to 30-11-1971, which was in excess of 80% of the quantity produced during the corresponding period in 1970, i.e. 30-1-1970 to 30-11-1970. A question arose whether a manufacturer of sugar who had worked the factory during the base period 1-10-1970 to 30-9-1970 but who had not produced any sugar during the period 1-10-1970 to 30-11-1970 would be entitled to rebate of excise duty on the entire production achieved during the months of October and November, 1971. The Indian Sugar Mills Association addressed a letter to the Government of India seeking clarification on this question and asking whether they would be right in presuming that the manufacturer in such a situation would be entitled to rebate of excise duty on the entire production achieved in the months ....
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.... achieved during the corresponding periods in the "Sugar year". The sugar manufacturers were allowed rebate of excise duty on that assumption and necessary adjustments were made in the account -current of the sugar manufacturers. For example, the petitioner in W.P. No. 3672 of 1976 produced 1974 quintals of sugar during the months of October and November, 1975. During the months of October and November 1972, the petitioner had produced no sugar though during the base period 1-10-1972 to 30-9-1973 the petitioner had worked in the factory. On the basis of the notification issued by the Government of India, the Central Excise authorities gave the petitioner a "proforma credit" for Rs. 3,86,960-00 on 27-3-1974. The proforma credit was allowed by the Chief Accounts Officer, Central Excise, Guntur. The Inspector of Central Excise certified that the particulars in the claim in respect of the base and incentive period had been verified with reference to the connected R.G. 1 and other relevant records and found to be in order. The Superintendent of Central Excise endorsed that he had verified the rebate claim with reference to the factory's production records for both incentive and base per....
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....ntents of the trade notice to the Notice of their constituent members. (Issued from File No. C. No. 111/9/88/76-A.3) Sd/- P.R. Krishanan, Collector. Pursuant to the trade notice all the petitioners were served with notices by the Collector of Central Excise asking them to credit the amounts of rebate allowed to them. The petitioners, having protested in vain have filed these applications for the issue of writs to declare the interpretation of the Government of India illegal and restrain the Central Excise authorities from taking further action pursuant to the trade notices and the consequential notices issued to the petitioners. 6. The first submission of the learned Counsel for the petitioners was that the interpretation placed by the Government of India in the trade notice dated 28-7-1976 was wrong and that the earlier interpretation of the Government of India was correct. I am inclined to agree with this submission. The object of the notification was to provide an incentive to the manufacturers of sugar so as to induce them to produce greater quantities of sugar, particularly during certain lean periods every year. Therefore, it was said if the sugar produced duri....
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....during the relevant periods mentioned against Serial Nos. 1 to 4. If the object of the notification was not to grant any exemption in respect of the sugar produced during any one of the four periods mentioned against Serial Nos. 1 to 4 if no sugar was produced during the corresponding period in the base year, the proviso to the notification would have been worded differently. In the face of t he proviso, I find it difficult to accept the arguments of the learned Counsel for the Central Government. 7. The submission of the learned Counsel for the Central Government is, however, supported by the decision of the Patna High Court in Civil Writ Jurisdiction Case No. 865 of 1966. According to the learned Judges, the interpretation placed by the manufacturers on the notification would lead to absurdity. They said : "For example, if a factory produces 1,000 quintals of sugar between 1-1-1964 and 30-6-1964 but produces only 900 quintals of sugar during the period 1-1-1965 to 30-6-1965 the factory will not be entitled to any rebate under the general provisions, and a factory which has no productions during the period 1-1-1964 to 30-6-1964, but produces only 900 quintals of sugar during....