PRATAPPUR SUGAR INDUSTRIES LTD. Vs. CCE

JUDGEMENT

(1.) The issue involved in this appeal, filed by M/s. Pratappur Sugar Industries Ltd., is whether the amount of excise duty collected by them from their customers is liable to be recovered from them under Section 11D of the Central Excise Act.

(2.) Sh. S.P. Ojha, learned Consultant, submitted that the Ministry of Food and Civil Supplies, Govt. of India, announced incentive scheme for new sugar factories and extension projects which, inter alia, provide concenssion to pay excise duty in respect of free sale sugar at the rate applicable to levy sugar and to retain the difference in excise duty; that the Revenue has directed them to deposit excise duty collected by them from their customers under the provisions of Section 11D of the Central Excise Act; that Notification Nos. 130/83 and 131/83, both dated 27.4.1983, providing concessional rate of duty, were issued in pursurance to the said incentive scheme and, therefore, incentive scheme and provisions of the Notification are to be read in harmoney; that any interpretation of taxing statute, which defeats the basic objectives of the scheme, has to be discarded. He relied upon the decision of the Supreme Court in the case of Balapur Sugar and Allied Industries Ltd. v. CCE, Aurangabad wherein the Supreme Court has held that "if there be two possible interpretation, it is that interpretation which subserve the object and purpose should be accepted. The objective of this notification (132/82 -CE) is by conferring rebate in excise duty, an incentive is given to a factory for increasing the sugar production during the lean period... If the interpretation, as sought by the Revenue, is to be accepted, the precending period has to be excluded... the interpretation for Revenue cannot be accepted as it defeats the very object of the notification." The learned Consultant, finally, submitted that a perusal of incentive scheme will reveal that surplus funds generated through sale of the additional quota would be utilised for repayment of term loans outstanding from the Central Financial Institution; that there is neither under enrichment nor retention of duty by the appellants.

(3.) Countering the arguments, Mrs. Neeta Lai Butalia, learned S.D.R., submitted that the issue involved in the present appeal stands decided by the Appellate Tribunal in the case of Kishan Sahakari Chini Mills Ltd. v. CCE, Allahabad/Kanpur wherein it has been held that since the appellants had collected Central Excise duty equal to the amount applicable to free sale sugar, they are required to deposit additional amount of duty under Section 11D of the Central Excise Act.