1985 (12) TMI 191 - AT - Central Excise

Summary

Issues:
1. Eligibility for rebate due to non-existence of factory during the base period.
2. Retrospective effect of exemption notification.

Eligibility for Rebate:
The case involved a dispute regarding the eligibility of a party for rebate under the Central Excises and Salt Act, 1944. The respondents, sugar manufacturers, filed a rebate claim based on a government notification. The Assistant Collector initially held that the factory must have existed before a specified date to qualify for the exemption. The Collector of Central Excise (Appeals) overturned this decision, emphasizing the interpretation of the notification and citing a Bombay High Court judgment for guidance. The Collector set aside the Assistant Collector's order, directing a refund if the claim complied with the notification's requirements.

Retrospective Effect of Exemption Notification:
The Tribunal dismissed the appeal against the Collector's decision, citing the Bombay High Court's judgment and the wording of the notification. The Tribunal found that the notification did not require the factory to be in production for the entire relevant period to qualify for the benefit. The Tribunal rejected the argument that a factory should have been operational for three full sugar years, stating that such an interpretation was unwarranted. Consequently, the Tribunal upheld the Collector's decision and dismissed the appeal.

High Court Reference:
Upon hearing the Reference Application, the Tribunal decided to refer the questions raised to the High Court for interpretation. The Tribunal framed a single question for reference, seeking clarification on whether the benefit was rightly granted to the assessee despite the factory's non-existence for part of the relevant period. The Tribunal also sought the High Court's opinion on whether granting the benefit constituted giving retrospective effect to the exemption notification.

In conclusion, the dispute centered on the interpretation of the exemption notification and the eligibility criteria for the rebate claim. The judgments of the Assistant Collector, the Collector of Central Excise (Appeals), and the Tribunal were based on different interpretations of the notification and relevant legal precedents. The matter has been referred to the High Court for further clarification on the issues raised by the parties.