HINDUSTAN SUGAR MILLS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) Interpretation of a notification dated 2 1 .04 . 1982 exempting the sugar industry from payment of duty of excise is in question in these writ petitions.

(2.) However, we may notice facts of the case in brief from C.W.P. No. 2407 of 1984 :- The petitioner carries on a business in production of sugar in the State of U.P. The petitioner contends that the sugar production in the country during The year 1981-82 surpassed all estimates and reached an all-time record of 84.35 lac tones as against 51.43 lac tones during the season 1980-81. The sugar industry allegedly had been paying a much higher price than the statutory minimum priee in the earlier years. However, during the relevant period, there had been reversal of the trend of diversion of sugarcane to gur and khandsari sector. Large scale diversion of sugarcane from gur and khandsari to the sugar factories forced many sugar factories in Bihar and U.P. to carry on crushing of sugar in hot summer months, during which the recovery appreciably declines. Allegedly, the off-take of sugar did no! keep paec with the increased production despite liberal releases of sugar as a result whereof there had been a significant fall in the free sale sugar price. The Central Government with a view to provide some relief to the sugar incluslry decided to export the full quota of 6.5 lac tones of sugar during the year in question even though the prices in the international market are depressed. The Government had also decided to create a buffer stock of sugar. According to the petitioner, with a view to compensate the sugar industry for lower recovery due to early start, of crushing, the Government of India announced rebate of excise duty at the rate of Rs.23.50 per quintal on free sale sugar, and Rs.15.30 per quintal on levy sugar on sugar produced during the period commencing on 28.10.1981 and ending on 30.11.1981. It is further the case of the petitioner that furthermore in order to compensate the sugar industry for lower recovery due to continuing crushing operations in summer months, the Government announced rebate of excise duty @ Rs.40/- per quintal on free sale sugar and Rs.24.50 per quintal on levy sugar on sugar produced during the period commencing from 01.05.1983 to 30.09.1983 in excess of the average production of the corresponding period of the preceding three years. For the aforementioned purpose, the notification in question was published on 21.04.1982, the relevant provisions whereof read thus :-

(3.) Clause 4 of the said notification dated 2 .CM. 1982, however, was amended by a notification dated 1106.1982 in the following terms :-