D C M LTD Vs. SUPERINTENDENT CENTRAL EXCISE

JUDGEMENT

(1.) This petition involves interpretation of Notification No. 146, dated 12 -10 -1974 issued by the Government of India Ministry of Finance (Department of Revenue and Insurance) New Delhi. The Notification was issued under Sub -rule (1) of Rule 8 of Central Excise Rules 1944. By the Notification Central Government exempted sugar described in column (2) of the Table given in the Notification, from so much of excise duty leviable thereon, as is specified in the corresponding entry in columns (3) and (4) of the said Table. For brevity, only relevant portion of the Notification referred above dated 12 -1 -1974 contained in Annexure 1 to the writ petition is reproduced herein below: 'NOTIFICATION CENTRAL EXCISES G.S.R. In exercise of the powers conferred by Sub -rule (1) of Rule 8 of the Centra] Excise Rules, 1944, the Central Government hereby exempts sugar, described in column (2) of the Table below and falling under sub -item (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: Table SI. Description of sugar Free Sale Duty of excise No. Sugar Levy Sugar 1. 2. 3. 4.

(2.) SUGAR produced in a factor during the period commencing on the 1st day of December, 1974, and ending with the 30th day of September, 1975, which is in excess of the average production of the corresponding period of the preceding five sugar years, that is: (a) on excise production up to 7.5% Rs. 20/ - Rs. 5/ - per quintal. per quintal. (b) on excess production on the next Rs. 40/ - Rs. 10/ - 10% per quintal per quintal. (c) On excess production on the next Rs. 50/ - Rs. 14/ - 10% per quintal. .per quintal. (d) On excess production on the next Rs. 60/ - Rs. 18/ - 10% per quintal. per quintal. (e) On excess production beyond Rs. 82/ - Rs. 22/ - 37.5% per quintal per quintal.' 2. Before endeavouring to interpret the relevant clause (2) of the Notification, quoted above, it is necessary to see the object of the Notification itself. The object of the Notification was to provide incentive to the sugar manufacturers for increasing and exceeding the production of sugar more than the average production of sugar, specially during certain lean periods every year. Therefore, only those manufacturers were entitled to rebate whose production exceeded the average production of the corresponding period of the preceding 5 sugar years. The relevant period stated in the Notification is the period commencing on the 1st day of December, 1974, and ending with the 30th day of September, 1975.

(3.) THE case as set out by the petitioner is as under : M/s. Mawana Sugar Works Mawana an unit of the petitioner D.C.M. Ltd. is engaged in manufacture of sugar by pan vacuum process. According to petitioner, during the period mentioned in the aforesaid Notification, the Unit produced sugar in excess of the average production i.e. 31,813 bags (each bag containing one quintal sugar), and submitted claim of rebate for the period commencing from 1st day of December 1974 and ending on 30th September 1975, as per the provisions of Notification quoted above. The Unit's claim of rebate amounting to Rs. 3,26,083.25 had been sanctioned vide ACAO Central Excise Kanpur's Order No. ACAO/Sug/Ex -Prod/75/42558, dated 3 -10 -1975 and credited in their Personal Ledger Account. The claim so granted was in terms of S. No. 2(a) of the table annexed to the above said Notification and the amount of rebate was calculated and sanctioned & @ 20/ - per quintal for free sale sugar and Rs. 5/ - per quintal for levy sugar.