ASSISTANT COLLECTOR OF CENTRAL EXCISE CUSTOMS HOUSE PONDICHERRY Vs. NEW HORIZON SUGAR MILLS PRIVATE LIMITED PONDICHERRY

JUDGEMENT

(1.) THIS is an appeal preferred against the order of gokulakrishnan J. dated 19-8-1978, allowing W. P. No. 7257 of 1975 filed by the respondent herein. The matter lies in a very narrow compass. The respondentherein is a Sugar Mill having been established in or about the year 1956. It went into production of sugar for the first time in 1960. Sugar is a commodity coming under the Central Excises and Salt Act, 1944 (1 of 1944) and excise duty is leviable thereon under item 1 of the First Schedule to the Act. However, Rule 8 of the Central Excise Rules, 1944. enables the Government to exempt excisable articles from the payment of duty either wholly or in part. In this case the government of India issued a notification No. 146/74-C. E. , dated 12-10-1974, which reads as follows :- "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-items (1) of item No. 1 of the First Schedule to the Central Excises and salt Act 1944 (1 of 1944) from so much of the duty of excise leviable thereon as is specified in the corresponding entry in columns (3) and (4) of the said table. Explanation :-In this notification - (a)'average production'in relation to sugar produced in the period by a factory which had gone into production for the first time in 1967-68 or earlier, means the simple average production during the corresponding period of the preceding five sugar years; (b)'free sugar sale'means sugar other than levy sugar; (c)'levy sugar'means sugar required by the Central government to be sold under an order made under clause (f) of sub-section (2)of Section 3 of the Essential Commodities Act, 1955 (X of 1955); (d)'sugar year'means the period of 12 months beginning with the 1st day of October and ending with the 30th day of September next following.

(2.) IN computing the production of sugar during the periods mentioned in column (2) of the said Table- (a) in respect of a factory mentioned in the said Table - (i) the date, as furnished in form R. G. 1 prescribed in appendix I to the Central Excise Rules, 1944 or in such other record as the collector may prescribe under Rule 53 or rule 173g of the said Rules shall be adopted, and (ii) any sugar obtained by refining sugar or khandsari sugar shall not be taken into account; (b) in respect of a factory mentioned in serial numbers 1 and 2 of the said Table - (i) any sugar obtained by reprocessing of sugar house products left over in process at the end of the base period or earlier shall be taken into account; and (ii) any sugar obtained by reprocessing of defective or damaged sugar or brown sugar, if the same has already been included in the quantity of sugar produced, shall not be taken into account.

(3.) MR. U. N. R. Rao, learned Counsel appearing for the appellants contends before us that paragraph 4 will govern paragraph 1 just like any other paragraph and therefore we have to consider the controversy on the application of paragraph 4 to paragraph 1 also. In other words, we have to take paragraphs 1 and 4 together and decide the controversy before us.