1980 (5) TMI 106 - CGOVT - Central Excise

Summary

Issues: Interpretation of Notification No. 146/74 regarding exemption on sugar production exceeding average production.

Analysis:
The judgment revolves around the interpretation of Sl. No. 2 of the Table appended to Notification No. 146/74 regarding the exemption on sugar production exceeding average production. The advocate representing the parties argued that a similar issue was raised in a previous revision application by M/s. Sankar Sahakari Sakhar Kharkhana, which was rejected by the Government. The advocate also highlighted a judgment by the High Court of Madras, where the court interpreted the notification favorably for the assessees. The Government considered these submissions and observed that the main issue in all four revision applications was the interpretation of Sl. No. 2 of the said notification.

The Government, after careful consideration, noted that the key question was how to interpret the percentages specified in Sl. No. 2 of the Table. They referred to a judgment by Justice Chinnappa Reddy of the Andhra Pradesh High Court, which held that the percentages were with reference to average production only. The Madras High Court, however, differed in their interpretation and held that the percentages were related to excess production only. The Government agreed with the Andhra Pradesh High Court's view, emphasizing that the exemption was for sugar produced in excess of the average production of the preceding five years.

The confusion in the case stemmed from the procedure for granting rebates under the notification. The rebate on excess production was given in advance through a credit in the petitioner's ledger account, even before the sugar was cleared. However, the Government clarified that the notification should be interpreted independently of the procedure. They reiterated that the percentages specified in the notification were indeed with reference to average production, as the wording of the notification was clear on this matter. The Government rejected the four revision applications based on this interpretation.