1996 (7) TMI 150 - HC - Central Excise

Summary

Issues:
Interpretation of Notification No. 146 dated 12-10-1974 exempting sugar from excise duty based on excess production during a specific period.

Analysis:

1. The judgment involves the interpretation of Notification No. 146 dated 12-10-1974 issued by the Government of India Ministry of Finance under Rule 8 of Central Excise Rules 1944. The Notification exempted sugar from excise duty based on exceeding the average production of the preceding five years during a specific period. The objective was to incentivize sugar manufacturers to increase production during lean periods.

2. The petitioner, a sugar manufacturer, claimed a rebate for exceeding the average production during the specified period. Initially, a rebate was granted, but a dispute arose when the petitioner submitted a revised claim for a higher amount based on different percentage slabs mentioned in the Notification for excess production.

3. The department contended that the exemption rates in the Notification were to be applied uniformly based on the excess production, calculated as percentages of the average production of the preceding five years. The petitioner argued that the percentages should be calculated only on the excess production itself.

4. The court emphasized that the Notification should be interpreted based on its actual wording and not altered. The relevant provision should be read in its entirety, clarifying that the exemption was for excess production exceeding the average production of the preceding five years, with varying rates based on percentage slabs.

5. The court ruled that the percentages for excess production mentioned in the Notification were to be calculated with reference to the average production of the preceding years. The petitioner's supplementary claim was denied as it did not exceed the 7.5% slab provided in the Notification.

6. Referring to previous judgments from different High Courts, the court held that the rebate calculation should be based on the percentage of excess production during the relevant year in relation to the average production of the preceding years, as stated clearly in the Notification.

7. The court dismissed the petitioner's claim for a higher rebate amount, stating that the Notification's provisions were to be strictly followed, and the petitioner had already received the admissible rebate amount for exceeding the average production during the specified period. The court upheld the orders of the authorities and dismissed the petition.