1992 (2) TMI 237 - AT - Central Excise

Summary

Issues:
- Interpretation of Notification No. 108/78 regarding rebate claim for excess sugar production
- Allowance of rebate based on duty actually paid
- Deduction of amount on account of reprocessing loss
- Compliance with Allahabad High Court's interim order regarding deduction of specific amount

Interpretation of Notification No. 108/78:
The case involved a dispute over a rebate claim for excess sugar production under Notification No. 108/78. The Assistant Collector held that rebate could only be allowed up to the duty actually paid by the respondents. However, the Collector (Appeals) disagreed, stating that the rebate should be allowed for the entire quantity of excess sugar produced at the rates specified in the notification. The Collector (Appeals) set aside the Assistant Collector's order and directed a recalculation of the rebate amount based on this interpretation.

Allowance of Rebate Based on Duty Paid:
The appellants argued that rebate should not exceed the actual duty paid, citing legal precedent from the Bombay High Court and the Supreme Court. They contended that the Collector (Appeals) erred in allowing rebate at rates specified in the notification without considering the duty actually paid. The Tribunal agreed with the appellants, holding that no exemption could exceed the duty payable. Therefore, the Tribunal set aside the Order-in-Appeal and restored the Assistant Collector's decision to allow rebate based on the duty actually paid.

Deduction of Amount for Reprocessing Loss:
The Assistant Collector had deducted a certain quantity on account of reprocessing loss, which was upheld by the Collector (Appeals). However, the Tribunal did not specifically address this issue in its judgment, focusing instead on the interpretation of the notification and the allowance of rebate based on duty paid.

Compliance with Allahabad High Court's Interim Order:
The Assistant Collector had made a deduction of Rs. 2108.66 in compliance with an interim order of the Allahabad High Court. The Collector (Appeals) deemed this deduction incorrect and set it aside. The respondents supported this aspect of the Order-in-Appeal. However, the Tribunal did not provide detailed reasoning on this specific deduction in its judgment, as the focus was on the broader issue of rebate calculation based on duty paid.

In conclusion, the Tribunal disposed of the appeal by setting aside the Order-in-Appeal and reinstating the Assistant Collector's decision to allow rebate based on the duty actually paid by the respondents under Notification No. 108/78.