COMMISSIONER OF INCOME TAX Vs. SYNDICATE BANK

JUDGEMENT

(1.) THE petitioners are manufacturers of Sugar and during the period 1-12-1973 to 30-9-1974 they had produced excess sugar and had claimed a rebate under Notification No. 152/74, dated 20-11-1974 issued under Rule 8(1) of the Central Excise Rules ('the Rules'). Under the notification a concessional rate of excise duty on each quintal of excess sugar produced at varied rates on levy sugar and free sale sugar, was payable as per the table. A reduced rate of duty was provided on the excess sugar produced by the petitioner-company as an incentive to produce more sugar. By applying the concessional rate of levy to the excess sugar produced, proforma credit of Rs. 33,79,904.30 Ps. was allowed as per the endorsement (Annexure E), dated 11-6-1975 issued by the Asst. Collector of Central Excise, Belgaum. THE actual date on which this sum was taken to credit in the books of the Company was 13-6-1975.

(2.) ON 3-4-1978, the third respondent issued a show cause notice to the petitioners why a sum of Rs. 9,14,370.39, out of Rs. 33,79,904.40 Ps. should not be recovered or readjusted in its personal ledger account in accordance with the Trade Notice No. 95/1975 issued by the Collector of Central Excise, Bangalore. The ground on which the said sum was sought to be readjusted in the running account of the petitioner-company was that the petitioner had availed of the concessional rate of duty in respect of 21,264.274 quintals of sugar which was exported by the Company during the relevant period and further that the sugar exported was exempt from the whole of the duty by the Central Government and that therefore the petitioner was not entitled to the rebate on the very same sugar exported.

(3.) THE Assistant Collector made an order on 6-6-1980 disagreeing with the contentions of the petitioner and held that the quantity of sugar exported out of the excess production was not entitled to any rebate since the Government had exempted the sugar exported out of India, from the whole of the duty paid on it. He also relied upon the Trade Notice 95/75 issued by the Collector of Central Excise for revoking or adjusting the concessional duty which the petitioner had avaied of as per Notification 152/74. He, therefore, directed a sum of Rs. 9,14,370.39 to be debited to the Personal Ledger Account of the petitioner.