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TMI Blog1985 (8) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... exempts sugar described in column (2) of the table below and falling under sub-item (1) of Item No. 1 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) from so much of the duty of excise leviable thereon as is specified in the corresponding entry in columns (3) and (4) of the Table. TABLE Sl. No. Description of sugar Duty of Excise free sale sugar Levy Sugar (1) (2) (3) (4) 1. Sugar produced in a factory during "the period commencing on the 1st day of October, 1974 and ending with the 30th day of November, 1974 in excess of the average production of the corresponding period of the preceding five sugar years in respect of which (a) the overall production of the factory for the entire sugar year does not equal the average production of the preceding five sugar years, Rs. 60 per quintal Rs. 16 per quintal (b) the overall production of the factory for the entire sugar year equals or exceeds the average production of the preceding five sugar years Rs. 82 per quintal Rs. 22 per quintal 2. In W.P. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Judge also relied on the decision of the Andhra Pradesh High Court in Etikopakka Co-operative Agricultural Society Ltd. v. Union of India - 1979 E.L.T. (J 533), 1970 A.W.R. 106. In that decision, the learned Judge was construing a similar provision in which the excess quantity of sugar which qualified for rebate had to be determined with reference to the quantity of sugar produced during the corresponding period, 1st of October to 30th November, 1972. The learned Judge took the view that "if no sugar was produced during the relevant period in the year 1972-73, it must be said that the production of sugar during the relevant period was nil and the excess sugar produced in the year 1973-74 should be calculated on that basis." The learned Judge also referred to the decision of Gokulakrishnan, J. (as he then was) in W.P. 7257 of 1975 - New Horizon Sugar Mills (P) Ltd., Pondicherry v. The Asstt. Collector of Central Excise, Customs House, Pondicherry and another - 1979 E.L.T. (J 75) (Mad.) in which the learned Judge was required to consider the very same notification with which we are concerned, and he took the view that even though during any of the corresponding period of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption is correct." 5. A letter from the Government of India under the signature of the Under Secretary to the Government of India, Ministry of Finance, Department of Revenue and Insurance, addressed to the Secretary General, Indian Sugar Mills Association, New Delhi read as follows : "I am directed to refer to your letter No. VP, dated 14-10-1972, on the above subject and to say that our presumption is confirmed in respect of established factories only (and not factories which had only a trial run during the base period)." 6. Admittedly, the factories of the petitioners are established factories. On the basis of these letters, the learned Judge held that the principle of promissory estoppel was attracted and that it is not open to the respondents to go back on their own representation and contend that the petitioners are not entitled to excise duty rebate merely because there was no production of sugar at all during the base period in the previous year or years. 7. The petitioners also raised the question of limitation and according to them, the demands were barred by rule 10 of the Excise Rules read with Rule 173J. The learned Judge took the view that the demands for repay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'average production' indicates that you have to find out the production for the corresponding period during the preceding five years and then take a simple average, which means that the average has to be arrived at by dividing the production by five. 10. Now the dispute between the department and the petitioner is that when in a given corresponding year there is no production at all and this may happen in all the five years, is the quantity of sugar eligible for the rebate to be determined on the basis that the average production is 'zero' as contended by the respondent or as contended by the department, since the production is 'zero', the sugar manufacturer is not entitled to claim any rebate in terms of Clause 1 of the notification. In other words, the argument of the department is that the concept of 'average production' of the corresponding period of the preceding five years contemplates some production because it is only then that the production during the relevant period viz., 1-10-1974 to 30-11-1974 can be said to be in excess of the average production. 11. It becomes necessary in this context to reproduce Clause 4 of the notification. Clause 4 reads as follows ; "Wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o this clause is that the contingency of. the production being nil is envisaged by the notification itself. Thereafter, unless there is clear indication in the notification itself that if there is no production in the corresponding period contemplated in the main part of Clause 1 the manufacturer will not be entitled to any rebate, it will be difficult to accept the contention of the department that merely because there was no production of sugar in the corresponding periods during the preceding five years, there is no excess in respect of which rebate can be claimed. It is important to point out that if the contingency of production being nil is well accepted in the notification itself and the fact that there can be no excess production with reference to production being nil because any figure of production will be in excess of nil production, the main part of Clause 1 of the notification will have to be so construed as to mean that even though during certain years or during all the relevant years, the production is nil, the average production must be considered to be nil with the result that the entire sugar produced during the period from 1st October 1974 to 30th November 1974 m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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