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TMI Blog1982 (9) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector, Customs and Central Excise, Bombay. 2. The petitioners are carrying on business of manufacturing sugar falling under Tariff Item 1(1) of the First Schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act). The petitioners secured licence to establish factory on September 19, 1970 and commenced production at their factory situated at Daulatnagar in Patan Taluka of Satara District in the year 1973. The Government of India, Ministry of Finance, published Notification No. 257/76-Central Excise, on September 30, 1976 in exercise of the powers conferred by sub-rule (8) of the Central Excise Rules, 1944 giving rebate of excise duty for the excess sugar produced in the Sugar Year 1976-77 to the sugar manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 28.10 per quintal Rs. 4.20 per quintal Explanation. - In this notification (a) "average production", in relation to sugar produced in a period in a factory, means the average production during the corresponding period of each of the preceding five sugar years or three sugar years, as the case may be; (b) "free sale sugar" means sugar other than levy sugar; (c) "levy sugar" means sugar required by the Central Government to be sold under an Order made under clause (f) of sub-section (2) of Section 3 of the Essential Commodities Act, 1955 (10 of 1955); (d) "Sugar year" means the period of twelve months commencing on the 1st day of October and ending with the 30th day of September next following. 3. Where product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Superintendent of Central Excise, Karad by their letter dated December 10, 1976. The petitioners claimed the rebate of the value of Rs. 12,64,898.25. The break-up of the claim mentioned in the letter is annexed as Exh. A to the petition. 4. The Superintendent of Central Excise by his order dated December 30th, 1976 communicated to the Karkhana turn down the claim for rebate of duty on the ground that the factory was licenced for production of sugar only for the year 1973 and therefore has not produced sugar in the preceding five sugar years, and therefore, does not fulfil the condition laid down in paragraph 1 of the Table of Notification. The order passed by the Superintendent of Central Excise was confirmed in appeal by the Appellate C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he period commencing from October 1, 1976 and ending with November 30, 1976 and which is in excess of the average production of the corresponding period to the preceding five sugar years. The expression 'average production' has been defined as the average production during the corresponding period of preceding five sugar years. The expression 'sugar year' has been defined as the period of 12 months commencing from 1st October and ending with September 30 of the next following year. Clause 3 of the notification provides for cases where during the block of five preceding years on one or more occasions the production of the factory was nil. Clause 3, inter alia, provides that when production in one or more periods of the preceding five years w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e preceding five years and has produced sugar in each year of the preceding five years. We are unable to accept the interpretation suggested by the Department and accepted by the authorities below. In our judgment, the petitioners are entitled to the advantage of the notification and the Superintendent of Central Excise was clearly in error in denying the rebate of duty sought by the petitioners. 6. There is one more aspect of the matter which cannot be overlooked. Shri Sawant invited our attention to a letter dated June 17, 1978 issued by the Department and wherein the Department has accepted that a factory producing sugar during any of the preceding three years will be eligible to the grant of rebate on the excess production as contempl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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