1982 (10) TMI 39 - HC - Central Excise

Summary

Issues:
1. Whether the petitioner is entitled to an exemption from payment of Excise duty under a notification dated 28-9-1972.
2. Whether the action taken by the Central Excise Authorities for recovering the refund is barred by limitation.
3. Whether the demand raised by the Excise Authorities was done without affording any opportunity to the petitioner and in contravention of the principles of natural justice.

Analysis:

Issue 1:
The petitioner, a sugar factory, claimed an exemption from Excise duty under a notification dated 28-9-1972. The Central Excise Authorities demanded a refund of Rs. 8,73,870/-, which the petitioner had already received. The Court analyzed the notification and found that the petitioner was entitled to the exemption as it had produced sugar during the base period, even though it did not produce any sugar during the corresponding months of the base period. The Court held that the demand for refund was not valid and quashed the demands raised by the Excise Authorities.

Issue 2:
The respondents argued that the petitioner was not entitled to the exemption as it did not produce any sugar during the corresponding months of the base period. However, the Court disagreed and held that since the petitioner did not produce any sugar during those months, any production in the subsequent period would be considered in excess. The Court cited decisions from other High Courts to support its interpretation of the notification and ruled in favor of the petitioner.

Issue 3:
The petitioner contended that the demand raised by the Excise Authorities was in violation of natural justice principles as no opportunity was given to the petitioner to present its case. The Court did not delve into this issue extensively as it found in favor of the petitioner on the first issue. However, the Court noted a decision of the Patna High Court, which was disagreed upon by other High Courts, and expressed agreement with the views of the Andhra Pradesh and Punjab and Haryana High Courts.

In conclusion, the Court allowed the petition, quashed the demand notices, and held that the petitioner was entitled to costs. The judgment clarified the interpretation of the notification and upheld the petitioner's right to the exemption claimed.