1985 (7) TMI 349 - AT - Central Excise

Issues Involved:
1. Interpretation of Notification No. 132/82-C.E.
2. Calculation of average production for rebate.
3. Validity of production records and their interpretation.
4. Authority to stay the operation of the Order-in-Appeal.

Issue-wise Detailed Analysis:

1. Interpretation of Notification No. 132/82-C.E.:

The appeal revolves around Notification No. 132/82-C.E., dated 21-4-1982, which grants partial exemption of duty on excess sugar produced during 1-5-1982 to 30-9-1982. The notification specifies that sugar produced in a factory during this period, which exceeds the average production of the corresponding period of the preceding three sugar years, is eligible for rebate. The key provision states that the data as furnished in Form R.G.1 should be adopted for computing production.

2. Calculation of Average Production for Rebate:

According to the respondents, the average production for the preceding three years was calculated by considering production figures from May to July 1979 and 1981, ignoring the year 1980 due to no production. This resulted in an average of 23,514.11 quintals, leading to an excess production of 59,281.15 quintals in 1982, entitling them to a rebate of Rs. 17,73,978.50.

Conversely, the Assistant Collector argued that since there was no production in May-July 1981, both 1980 and 1981 should be ignored, making the average production the same as May-July 1979, which was 44,768.22 quintals. This resulted in an excess production of 38,027.04 quintals, with an admissible rebate of Rs. 9,93,740.10.

3. Validity of Production Records and Their Interpretation:

The Assistant Collector contended that the 2260 quintals of sugar produced in 1981 were actually produced in April and not May, based on the cessation of cane crushing on 28-4-1981. However, the Collector (Appeals) found that the R.G. 1 record showed production from 1st May to 7th May 1981, and the reduction in rebate was deemed hypothetical and untenable.

The Tribunal confirmed that the practice was to enter sugar in the R.G. 1 register when it was bagged, which was done from 1-5-1981 onwards. Therefore, the production figure for May-July 1981 was valid, and the respondents were entitled to the rebate as claimed.

4. Authority to Stay the Operation of the Order-in-Appeal:

The Tribunal noted that the Collector's direction to stay the operation of the Order-in-Appeal lacked legal basis, as the power to stay did not vest with either the Collector or the Assistant Collector. This direction was deemed inappropriate and should have been avoided.

Conclusion:

The Tribunal upheld the Collector (Appeals)' decision, confirming that the data in the R.G. 1 register should be relied upon for computing production under Notification No. 132/82. The respondents were entitled to the full amount of rebate as claimed, and the appeal by the Department was rejected. The Tribunal also highlighted the improper direction to stay the Order-in-Appeal, emphasizing the lack of legal authority for such a directive.

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