2010 (7) TMI 475 - HC - Central Excise

Sugar Computation of average production of sugar Exemption Notification - no ambiguity in Clause (3) of the notification in question which category provides that the period in which the sugar was not produced therein shall be ignored - principle of reading down cannot be applied Each assessment year with regard to taxing matter should be considered independently while evaluating the tax

Summary

Issues: Interpretation of excise duty exemption notification for sugar mills based on average production of preceding years.

Analysis:
1. Calculation of Average Production: The petitioner, a sugar mill, sought excise duty exemption based on a notification dated 30-4-1983. The dispute arose as the respondents did not consider the average production of the three preceding years (1978-79, 1979-80, 1980-81) when calculating excise duty for the period from May 1, 1983, to September 30, 1983.

2. Contentions of the Parties: The petitioner argued that since there was production only in 1978-79 and nil production in the following two years, the average production should have been based on dividing the 1978-79 production by three. In contrast, the respondents contended that as per the notification, years with nil production should be ignored, and the average should be calculated based on the actual production year.

3. Legal Precedents: The petitioner relied on judgments from the Supreme Court and High Courts, emphasizing the interpretation of similar notifications in the past. However, the court noted that each notification should be independently analyzed based on its specific language and provisions.

4. Interpretation of Notification: The court analyzed the language of the 1983 notification, highlighting that periods with no sugar production should be disregarded when calculating the average production for excise duty exemption eligibility.

5. Judicial Interpretation: The court emphasized the need to interpret statutes strictly and not supply omissions through judicial processes. It reiterated that each assessment year should be considered independently, especially in taxing matters, even if notifications differ in language and provisions.

6. Dismissal of Writ Petition: Based on the interpretation of the notification and legal principles, the court dismissed the writ petition, stating that no grounds for interference under Article 226 of the Constitution of India were established. The judgment concluded with the dismissal of the petition without any costs awarded.

This detailed analysis of the judgment from the Allahabad High Court provides a comprehensive understanding of the issues involved in interpreting excise duty exemption notifications for sugar mills based on average production of preceding years.