UNION OF INDIA Vs. MYSORE SUGAR CO LTD

JUDGEMENT

(1.) These appeals are disposed of by a common order since a common question touching the interpretation of the relevant provisions of the notification dated 4-10-1973 (Annexure-A produced in W.A. No. 1910/83) as amended by the notification dated 20-4-1974 arises for consideration in these appeals 1 he notifications were made by the Central Government in exercise of the power under sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 gr?nting certain percentage of rebate on the payment of excise duty for the manufacture of sugar for the period 1-10-1973 to 30-9-1974. The amendment of Annexure-A notification by Annexure-B notification is not very materiel for the purpose of these appeals since the point for consideration is the effect of the proviso to the notification (Annexure-A) on the quantum of rebate that was admissible to the sugar factories for the period 1-10-1973 to 30-9-1974. The interpretation of this notification has given rise to conflicting judgements in other High Courts and two learned Judges of this Court have adopted the view favouring the sugar factories following the decision of the Andhra Pradesh High Court reported in Etikoppaka Co-operative Agricultural Society Ltd. v. Union of India (1979 (2) Taxation Law Reports 2454. The terms of the notification which came up for consideration before the Andhra Pradesh High Court are identical to that of Annexure-A-notification in these appeals. The Andhra Pradesh High Court has taken the view that the proviso in Annexure-A indicates the true scope of items-1 to 4 in Annexure-A if that proviso is kept in view, sugar factories though they have not produced sugar during the corresponding period in the base year would be entitled to rebate at the rates mentioned in Column 3 of the Notification on the quantum of sugar produced during the relevant period of the sugar year.

(2.) Before we proceed further, we must clarify what the sugar year means R. 11 and what the base year means in relation to the claim for rebate in excise duty.

(3.) it was the policy of the Central Government in order to encourage the sugar factory owners to produce more sugar during the lean periods of production, to allow rebate at a certain rate in excise duty on the quantum of sugar produced by the owners in excess of the sugar produced during the base year. The base year' for the purpose of claiming rebate is defined in the explanation to the notification (Annexure-A) and it reads as: