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TMI Blog1985 (6) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... ncentives to the manufacturers of sugar. One of the incentives was rebate in the levy of an excise duty on sugar produced during certain periods in a year to the extent that it exceeded the quantity of sugar produced during the corresponding period of the previous year. By Notification dated 4-10-1973 (Annexure-1), issued under Rule 8, Central Excise Rules, 1944 (for short 'the Rules'), as amended by a subsequent Notification dated 20-4-1974 (Annexure-2), the Government announced a rebate of excise duty at the rate of Rs. 30/- per quintal of sugar produced by any factory during the month of April, 1974, which was in excess of 180% of the quantity of sugar produced during the month of April, 1973, provided that exemption should not be admissible to a factory which did not work during the base period. In Annexure-1, it has been clearly laid down that the expression 'based period' means the period commencing from the first day of October, 1972 and ending with the 30th day of September, 1973. In pursuance of the above Notification on 22-5-1974 the petitioner made an application claiming rebate of Rs. 1,51,830/- i.e. the amount of rebate of excise duty admissible at the rate of Rs. 30/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30/- should not be recovered from the company under Rule 10A of the Rules. The petitioner submitted a reply to the show cause notice stating that the petitioner company was not liable to be called upon to make the refund and that the Government was estopped by the principle of equitable and promissory estoppel on going back upon their earlier decision on this point On an earlier occasion the Central Board of Excise and Customs had stated that a sugar producing company was entitled to the incentive rebate in respect of the production during a particular period, even though the production in the corresponding period of the previous year was nil. The petitioner also submitted that the claim of the Government for refund of the amount was barred by limitation under Rule 10 of the Rules. Opposite party 2 by his Order dated 17-5-1977 (Annexure-9) negatived the contention of the petitioner and confirmed the demand of Rs. 1,51,830/- to be recovered from the petitioner. Against the aforesaid order, the petitioner preferred appeal before the Appellate Collector of Central Excise, Calcutta. The Appellate Collector in his order dated 5-11-1979 (Annexure-10) held that the contention of the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1974, which is in excess of 110% of the quantity of sugar produced during the corresponding period in 1973. Thirty rupees per quintal. 4. Sugar produced in a factory during the period commencing from the 1st day of 1974, and ending with the 30th day of September, 1974, which is in excess of 110% of the quantity of sugar produced during the corresponding period in 1973. Twenty rupees per quintal. 5. Sugar produced during the period commencing from the 1st day of October, 1973 and ending with the 30th day of September, 1974 by a factory which commenced production on or after the 1st day of October, 1972, which is in excess of ten thousand metric tones. Thirty rupees per quintal. 6. Sugar produced during the period commencing from the 1st day of October, 1973 and ending with the 30th day of September, 1974, by a factory which commenced production for the first time on or after the 1st day of October, 1973, which is in excess of five thousand metric tonnes. Thirty rupees per quintal. Provided that the exemption mentioned against serial numbers 1 to 4 of the said Table shall not be admissible to a factory which did not wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the trade notice of the Government of India dated 28-7-1976 that rebate cannot be allowed as there was no production in April, 1973 which was the base year. The same view was taken by opposite parties 3 and 4 as per Annexures 9 and 10. 4. The object of the notification in Annexure-1 (as amended by Annexure-2) was to provide incentive to the manufacturers of sugar so that they may be induced to produce more quantities of sugar. Therefore, it was said, if the sugar produced during a certain period, i.e. from 1st October, 1973, to 30th September, 1974, was in excess of the sugar produced during the corresponding period in the previous year, called the base period, i.e. from 1st October, 1972 to 30th September, 1973, the manufacturer would be entitled to certain rebate of excise duty on the excess sugar produced. On behalf of the opposite parties it is argued that in order to get the rebate of excise duty, a manufacturer must have to produce something, i.e., some sugar, during the relevant period in the base year. It is only when some was produced during a certain period of the year 1972-73 that the sugar produced during the corresponding period of the year 1973-74 can be said to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in 1972 Tax LR 1684 [Shree Krishna Gyanoday Sugar Ltd., v Union of India] which held a contrary view. Similar matter also came up before the Madras High Court in Writ Petition No. 36 of 1977, [reported in 1983 E.L.T. 484 (Mad.)] and some other writ petitions which were heard and decided analogously and the judgment was delivered on 28-9-1979 wherein the view expressed by the Andhra Pradesh High Court in (1978) 2 Andh WR 106 (supra) was accepted. The decision of the Patna High Court reported in 1972 Tax LR 1684 (supra) was placed before us wherein it was held :- "The idea behind exemption being to encourage production, the general provision under Serial Nos. 1 and 2 was not 'meant to apply to factories which did not qualify for exemption, not having some production in the base year also, otherwise it may lead to absurdity. For example, if a factory produces 1,000 quintals of sugar between the 1st January, 1964, and the 30th June, 1964 but produces only 900 quintals of sugar during the period 1st January, 1965 to the 30th June, 1965, will not be entitled to any rebate under the general provisions, and a factory which has no production during the period 1st January to the 30th J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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