1983 (10) TMI 52 - HC - Central Excise

Issues Involved:
1. Imposition and realization of Excise Duty and Additional Excise Duty on Levy sugar.
2. Interpretation and applicability of various Government Notifications regarding Excise Duty and Additional Excise Duty.
3. Eligibility for incentives under the Government scheme for new sugar factories.
4. Demand for payment of Excise Duty and Additional Excise Duty by the petitioner.
5. Request for a certificate under Article 134A of the Constitution for an appeal to the Supreme Court.

Issue-wise Detailed Analysis:

1. Imposition and realization of Excise Duty and Additional Excise Duty on Levy sugar:
The petitioner, a Co-operative Sugar Factory, sought orders directing the respondents not to impose or realize Excise Duty and Additional Excise Duty at the rates of 15% and 5% respectively on Levy sugar. The factory, which commenced production in November 1975, claimed entitlement to certain incentives, including concessions in Excise Duty and Additional Excise Duty as per Government Notification No. 35/76-C.E., dated 26th April 1976.

2. Interpretation and applicability of various Government Notifications regarding Excise Duty and Additional Excise Duty:
The Government of India issued several notifications modifying the rates of Excise Duty and Additional Excise Duty on sugar required to be sold to the Central Government (Levy sugar). The petitioner argued that these notifications reduced the rates from the original 15% and 5%, and thus, the petitioner was not liable to pay the demanded amount. Conversely, the respondents contended that the petitioner misinterpreted Notification No. 35/76, asserting that the petitioner was liable to pay the Excise Duty and Additional Excise Duty at the rates of 15% and 5% on Levy sugar, as there was no change in these rates.

3. Eligibility for incentives under the Government scheme for new sugar factories:
The Government scheme aimed to make new sugar factories economically viable by providing incentives, including higher free sale quotas and reduced Excise Duty rates. The petitioner's factory, which commenced production after April 1, 1974, was eligible for these incentives. The scheme allowed the petitioner to sell 73% of its production in the open market, with 35% attracting normal Excise Duty and the remaining 38% attracting reduced rates of 15% and 5%.

4. Demand for payment of Excise Duty and Additional Excise Duty by the petitioner:
The petitioner's eligibility for the incentive scheme was questioned by the audit party, leading to a demand notice for Rs. 6,25,973.63. The petitioner argued that they had already paid the requisite Excise Duty and Additional Excise Duty at the reduced rates and that the demand was based on a misinterpretation of Notification No. 35/76. The respondents maintained that the demand was justified and in accordance with the law.

5. Request for a certificate under Article 134A of the Constitution for an appeal to the Supreme Court:
The petitioner sought a certificate under Article 134A to appeal to the Supreme Court, arguing that the case involved substantial questions of law of general importance. The court, however, found no substantial question of law warranting an appeal and rejected the request.

Conclusion:
The court concluded that Notification No. 35/76 provided a consolidated scheme of benefits for new sugar factories, including specific rates of Excise Duty and Additional Excise Duty. The subsequent notifications did not modify or supersede these rates. Therefore, the petitioner's contention that the rates were reduced by subsequent notifications was without merit. The writ petition was dismissed with costs, and the request for a certificate under Article 134A was denied.

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