JASWANT SUGAR MILLS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The only question which arises for determination in this petition under Article 226 of the Constitution of India is the construction to be placed on a proviso contained in a notification issued by the Central Government bearing No. 13/65 of February 13, 1965 under the power conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944. This notification was, 'admittedly, issued with a view to give incentive to the production of sugar in our country. The notification was issued exempting sugar in column 2 of the table therein falling under sub-item (1) of the first Schedule of the Central Excise and Salt Act, 1944 from certain duty leviable thereon as was in excess of the duty specified in column 3 of the said table. In plain language, for production of sugar over and above a certain quantity the manufacturer was entitled to certain rebate.

(2.) The petitioner is a public limited company incorporated under the Indian Companies Act. Its business is to manufacture and sell sugar: The petitioner manufactures sugar in its factory situated at Meerut.

(3.) There is a sugar factory known as S. B. Sugar Mill at Bijnor. It was originally owned by a. partnership concern comprised of six brothers. The partnership firms was dissolved through court action in 1944. The mill thereafter became the property of the six brothers as co-ownera. Banarsi Dass is one of the brothers. This mill also used to manufacture and sell sugar under the name and style of S. B. Sugar Mills, Bijnor. In 1948 Banarsi Dass purchased the share of one of his brothers. He, therefore, became a co-owner to the extent of 1/3 in this joint property. At the time of the dissolution of the partnership an agreement was arrived at between the six brothers that the running of the factory will be leased out by the co-owners to anyone ' among themselves on a bid being made by each of the coiowners. The lease was to be for a period of 5 years. Banarsi Dass took the lease of S. B. Sugar Mills, Bijnor in 1961 for a period of 5 years.