1993 (10) TMI 154 - AT - Income Tax

Summary

Issues:
1. Interpretation of Notification No. 130/83 and 131/83 regarding conditions for concession eligibility.
2. Validity of industrial license issuance and amendments between 1980-1985.
3. Dispute over whether the appellants fulfilled the conditions for excise duty rebate under the incentive scheme.
4. Justifiability of denial of benefits by the Collector (Appeals) based on non-satisfaction of notification conditions.

Analysis:
1. The case involved a dispute regarding the eligibility of M/s. Thandava Co-operative Sugars Ltd. for concession under Notification No. 130/83 and 131/83 for clearing V. P. Sugar as free sale sugar. The issue arose as the appellants did not fulfill the conditions laid down in the notifications, specifically related to the issuance of an industrial license between 1980-1985 for setting up a new sugar factory or expanding an existing one.

2. The key contention was the interpretation of Clause 3 of Notification No. 130/83, which required a letter of intent or industrial license to be issued between 1980-1985 and certified by the Chief Director of Sugar. The industrial license certifying as a new sugar factory was issued to the appellants in 1989, post the specified period. The appellants argued that their factory was considered for a new unit instead of substantial expansion, supported by a certificate from the Chief Director of Sugar.

3. The appellants highlighted that the delay in issuing the required license should not penalize them, as they had applied for expansion earlier and faced financial difficulties. The Collector (Appeals) denied the benefit based on the non-satisfaction of conditions, emphasizing events pre-1980. The appellants' argument was supported by the fact that the unit was renewed periodically post-1980, and they transitioned to a new factory in 1984, as acknowledged by the Ministry of Industry.

4. The Tribunal considered the delays caused by the government in issuing the amended license and the transition to a new factory by the appellants. It was noted that the party should not be disadvantaged for delays beyond their control. The Tribunal found no justification to deny the benefit of exemption under Notifications 130/83 and 131/83, setting aside the Collector (Appeals) order and allowing the appeal in favor of the appellants. The decision was based on the specific circumstances of the case and the transition to a new unit as supported by relevant certifications and representations.