1979 (8) TMI 83 - HC - Central Excise

Sugar Year - Connotation of - Taxing Statute - Notification - Deficiency in language - Effect - Alternative remedy - Existence of

Summary

Issues Involved:
1. Correct calculation method for determining average sugar production for rebate eligibility.
2. Applicability of paragraph 4 of the notification to sugar mills established before 1967-68.
3. Jurisdiction and appropriateness of filing a writ petition under Article 226 of the Constitution of India.

Issue-Wise Detailed Analysis:

1. Correct Calculation Method for Determining Average Sugar Production for Rebate Eligibility:

The respondent, a sugar mill established in 1956, claimed a rebate under Notification No. 146/74-C.E., dated 12-10-1974, which provided exemptions on excise duty for sugar produced in excess of the average production of the preceding five sugar years. The respondent calculated the average production by dividing the total production of 42,360 quintals by 5, resulting in 8,472 quintals. The Assistant Collector of Central Excise, Pondicherry, contested this calculation, arguing that the production should be divided by 2, excluding the years with zero production during October-November. The court held that the respondent's method was correct as per paragraph 1(a) of the notification, which did not require exclusion of years with zero production for mills established before 1967-68. Thus, the respondent was entitled to a rebate of Rs. 6,59,104.

2. Applicability of Paragraph 4 of the Notification to Sugar Mills Established Before 1967-68:

The appellants argued that paragraph 4 of the notification, which states that years with zero production should be ignored, applied to all sugar mills. The court, however, found that paragraph 4 explicitly referred to the "sugar year," defined as a 12-month period from October 1 to September 30. Since the respondent's mill had production in the sugar years, even if not in the specific months of October-November, paragraph 4 did not apply. The court rejected the appellants' request to interpret "production" as referring only to the relevant months, maintaining that the language of the notification did not support such an interpretation.

3. Jurisdiction and Appropriateness of Filing a Writ Petition Under Article 226 of the Constitution of India:

The appellants contended that the respondent had an alternative remedy under Section 33 of the Central Excises and Salt Act and should not have filed a writ petition. The court found that the matter involved interpretation of a statutory notification and did not require investigation into controverted questions of fact, making it appropriate for adjudication under Article 226. The court also noted that Article 226(3) of the Constitution, which restricted such petitions if alternative remedies existed, was no longer in force. Consequently, the respondent was justified in approaching the court under Article 226, and the writ petition was rightly entertained.

Conclusion:

The court dismissed the appeal, affirming the respondent's entitlement to a rebate of Rs. 6,59,104. The court also rejected the appellants' request for a certificate under Article 133 of the Constitution for an appeal to the Supreme Court, as the matter did not involve a substantial question of law of general importance.