TaxTMI 
TaxTMI 
1981 (2) TMI 87
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....The appellant in Letters Patent Appeal No. 835 of 1980 did not produce any sugar in the month of May, 1973 as well. 3. The Government of India issued Notification No. 189/73-Central Excises, dated October 4, 1973, where sugar incentive rebate on the production during the incentive period detailed therein was allowed. The relevant part of this notification reads as under :- "(b) Notification No. 189/73-Central Excises, dated 4th October, 1973. In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts sugar described in column (2) 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 (....
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....hich did not work during the base Period. ** ** ** ** ** ** In this notification the expression "base period" means the period commencing from the 1st day of October, 1972 and ending with the 30th day of September, 1973." 4. The Notification 189/73 was later on amended by another notification dated April 20, 1974 and the entries at Serial Numbers 2, 3 and 4 in the earlier notification were substituted. The relevant part of the amending notification dated April 20, 1974 ....
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....e corresponding period in 1973. Thirty rupees per quintal. 3A. Sugar produced in a factory during the period commencing from the 1st day of May, 1974 and ending with the 30th day of June, 1974 which is in excess of 180% of the quantity of sugar produced during the corresponding period in 1973. Forty rupees per quintal. 5. The appellant in Letters Patent Appeal No. 835/80 produced sugar in the months of April and May, 1974 which was in excess of 180 per cent of the corresponding months of the previous year (the production in April and May 1973 being nil) and claimed sugar incentive rebate at the rate of Rs. 30/- and Rs. 40/- per quintal under Items 2B and 3A respectively of the notification dated April 20, 1974. The total amou....
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....ts having not produced any sugar in the months of April and May, 1973 are entitled to the sugar incentive rebate in terms of the amended notification dated April 20, 1974. The contention of the learned Counsel for the appellants is that as the appellants did not produce any sugar in the months of April and May, 1973, their production for those months shall be taken as nil. The object of the sugar incentive rebate is to allure the sugar mills to produce sugar in the lean months when due to dryness in sugarcane the production of sugar becomes uneconomical. The sugar incentive rebate is allowed in the larger national interest and not for the specific benefit of sugar manufacturing units. In this situation to hold that the sugar mills which did....
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....s inapplicable. This contention was repelled. It was held if no sugar was produced during the relevant period in the previous year it must be said that the production of sugar during the relevant period was nil and the excess sugar produced in the current year should be calculated on that basis. It was further held that if the interpretation as advanced on behalf of the Central Government was to be upheld it would lead to absurd results. It would mean that if a manufacturer produce even one ounce of sugar during the relevant period of the previous year, he would be entitled to rebate, but not if he produced nil sugar. The proviso to the notification that the exemption mentioned against Serial Numbers 1 to 4 of the notification shall not be ....
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.... be entitled to rebate over the entire quantity at the scale as indicated above. Such a result would be against the terms and spirit of the notification." 9. The Patent view was not approved in the Andhra Pradesh judgment. It was held that the object of the notification was to give an incentive to manufacturers to increase their production. If a manufacturer who was unable to produce any sugar during a certain period is induced to produce a large quantity of sugar during the corresponding period next year, it certainly, is a notable achievement, which well deserves the incentive. On the other hand, if a manufacturer producing 1000 quintals during a certain period in one year produces less during the corresponding period next year, he can....