1983 (2) TMI 291 - AT - Central Excise

Issues Involved:
1. Applicability of concessional duty rates under Notification No. 36/76 vs. Notification No. 317/77.
2. Entitlement to refund of duties paid in excess of the concessional rates.
3. Interpretation of the term "levy sugar" and its implications on duty rates.

Issue-wise Detailed Analysis:

1. Applicability of Concessional Duty Rates:
The primary issue was whether the concessional duty rates prescribed in Notification No. 36/76 or those in Notification No. 317/77 would apply to the sugar cleared by the appellants. Notification No. 36/76, issued on 25-2-1976, extended a concessional rate of basic excise duty of 15% ad valorem and an additional excise duty of 5% ad valorem for sugar exceeding 35% of the production in excess of the "average production." This rate was based on the price determined by the Central Government for "levy sugar." On 16-11-1977, Notification No. 317/77 was issued, fixing a lower concessional rate of 7.5% ad valorem for basic excise duty and 5% ad valorem for additional excise duty for "levy sugar." The appellants contended that they were entitled to clear sugar at these lower concessional rates and sought a refund for duties paid in excess.

2. Entitlement to Refund:
The appellants argued that the higher rates prescribed in Notification No. 36/76 became inoperative upon the issuance of Notification No. 317/77. They contended that the lower rates of 7.5% ad valorem and 5% ad valorem should apply to their case, and any duties paid in excess should be refunded. The appellants stressed that the intention of the government, as per the letter from the Chief Director (Sugar), was to provide incentives to expanded units by equating the concessional rates of duty for additional free-sale sugar quota with those for levy sugar.

3. Interpretation of "Levy Sugar":
The term "levy sugar" was defined in Notification No. 36/76 as sugar required by the Central Government to be sold under an order made under the Essential Commodities Act. The appellants argued that the extra levy-free quota of sugar should be considered as levy sugar for excise duty purposes. However, the Tribunal noted that the sugar cleared under Notification No. 36/76 was not "levy sugar" but extra quotas of free-sale sugar. The Notification provided a concessional rate of duty but did not equate the duty rates for free-sale sugar with those for levy sugar. The Tribunal emphasized that Notification No. 36/76 expressly stated that the concessional rates in Notification No. 210/73 would not apply to sugar cleared under it.

Tribunal's Decision:
The Tribunal upheld the order of the Appellate Collector, rejecting the appellants' contention. It concluded that Notification No. 36/76 contained clear provisions regarding the concessional duty rates and the assessable value based on the price of levy sugar. The Tribunal found no ambiguity or absurdity in the interpretation of the Notification. It referred to the Supreme Court's judgment in M/s. Hansraj Gordhandas v. Assistant Collector of Central Excise & Customs, emphasizing that in a taxing statute, regard must be had to the clear meaning of the words, and the taxpayer cannot be denied the benefit of exemption if they fall within the plain terms of the Notification. The Tribunal held that the appellants were not entitled to the lower concessional rates under Notification No. 317/77 for the sugar cleared under Notification No. 36/76 and rejected the appeal for a refund of duties paid in excess.

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