1. In this petition under Article 226 of the Constitution, the petitioner has challenged the order dated 30-1-1978 (Exhibit-F) of the Appellate Collector of Customs and Central Excise, Madras (hereinafter referred to as the Collector) in Appeal No. 199 of 1978 affirming the order dated 9-3-1977 of the Assistant Collector of Central Excise, I.D.O., Bellary (hereinafter referred to as the Assistant Collector) in order No. V/1/30/32/74 B. 1 (Exhibit-E).
2. The petitioner is a manufacturer of sugar and is, therefore, exigible to excise duties under the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act). The factory of the petitioner that manufactures sugar was in existence and was working during the 'base period' defined in the Explanation to Notification No. 189/73, dated 4-10-1973 (Exhibit-A) issued by the Central Government under sub-rule (1) of rule 8 of the Central Excise Rules, 1944 (hereinafter referred to as the Rules) framed under the Act which allowed certain exemptions on sugar produced in the sugar factories on the terms and conditions stipulated therein. By Notification No. 78/74, dated 20-4-1974 (Exhibit-B) the Central Government with the object of encouraging the sugar factories to produce more sugar during loan periods granted further exemptions on the sugar manufactured in those periods specified in that notification.
3. In this petition we are concerned with Item No. 3 of the notification dated 20-4-1974 which reads thus :
'3. Sugar produced in a factory during the period commencing from the 1st day of May, 1974 and ending with the 30th day of June, 1974 which is in excess of Thirty rupees 110% and not in excess of 180% of the quantity of per quintal sugar produced during the corresponding period in 1973.'
From the period from 1-5-1974 to 30-6-1974 the petitioner produced certain quantity of sugar, paid excise duties demanded by the authority and made a claim for rebate in terms of the notification dated 20-4-1974 before the Assistant Collector who by his order dated 9-3-1977 (Exhibit-E) has rejected the same in these words :
'In terms of items 3 and 3A of the table appended to notification No. 78/74-C.E. the sugar produced in a factory during the period 1-5-1974 to 30-6-1974 is entitled for rebate. Accordingly, M/s. Kampli Co-operative Sugar Factory have preferred their rebate claim for the period from 1-5-1974 to 30-6-1974. But, this factory has not produced any sugar during the corresponding period in 1973 i.e., May and June, 1973. In other words, there was nil production during the corresponding base sub-period. Notification No. 189/73, dated 4-10-1973 clearly indicates that the exemption mentioned in the notification shall not be admissible to a factory which did not work during the base period. It is therefore clear that this factory is not entitled to any rebate if it has not produced any sugar during the base period. The expressions 'excess' and 'quantity produced' used in the notification are significant. Excess in the context can only mean the quantity by which one exceeds another implying thereby that there must be two sets of production figures for comparison to determine the excess produced. In the instant case, M/s. Kampli Co-operative Sugar Factory has production in the month of May, 1974 and nil production in the month of June, 1974. There was no production in the corresponding period of the sub-base period i.e., May, 1973.'
Against the said order of the Assistant Collector, the petitioner filed an appeal before the Collector, who by his order dated 30-1-1978 (Exhibit-F) has dismissed the said appeal.
4. The petitioner has urged that the extremely artificial and technical construction placed by the authorities, has defeated the object and intendment of the beneficial exemption granted by Central Government to encourage the manufacture of sugar during the lean periods, is unwarranted and manifestly illegal.
5. In justification of the impugned orders made, the respondents have filed their return seeking to sustain them on the very reasons set out by the Assistant Collector with which the Collector has concurred. Secondly, the respondents have urged that the petitioner who had not availed the remedy of a revision provided by Section 36 of the Act is disentitled to invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution.
6. Sri G.V. Shantharaj, learned counsel for the petitioner contends that the construction placed by the authorities was too artificial and technical and had defeated the very incentive relief granted by Central Government under the Act. In support of his contention, Sri Shantharaj strongly relies on an unreported ruling rendered by Chinnappa Reddy, J. (as he then was) of the Andhra Pradesh High Court in the Etikoppaka Co-operative Agricultural Society Limited, Darlapudi and Others v. Union of India and Another (Writ Petitions Nos. 3672 of 1976 and connected cases decided on 3-2-1978) - 1979 E.L.T. (J 533).
7. Sri. K. Shivashankar Bhat, learned counsel for the respondents in justifying the impugned orders on the very reasons given by them and other reasons urged that this is a fit case in which this Court should decline to exercise its extraordinary jurisdiction on the ground the petitioner had not availed and exhausted the remedy of a revision under Section 36 of the Act.
8. A revision is not a right given to a party. A revision is only a power conferred on an authority which it may or may not exercise at all. Any failure to avail the remedy of a revision does not touch on the jurisdiction of this Court to exercise its extraordinary jurisdiction under Article 226 of the Constitution. In any event, this Court should be loathe to decline to exercise its jurisdiction after issuing rule nisi at this belated stage when the remedy cannot be availed by the petitioner. For these reasons, I see no merit in this contention of Sri Bhat and I reject the same.
9. Both the authorities have found that the petitioner should have produced some sugar for the corresponding period of May, 1973 to claim the incentive rebate. So far as non-production of sugar for May, 1973 the petitioner does not dispute the same.
10. What is important under the Notification dated 20-4-1974 (Exhibit-B) is the production of sugar during the lean period referred to in that notification and not the non-production during the corresponding period of the previous year. The emphasis is on production during the lean period specified in the notification and not on non-production during the previous period. Hence, the non-production during the previous period, assuming there was no production, was totally irrelevant to reject the claim of the petitioner. Without any doubt, the construction placed by the authorities is too artificial, technical and has defeated the very object with which Government issued the notification.
11. Sri Bhat contends that the word 'production' should be literally construed as there should be production of something however small and insignificant may be and cannot include non-production during the previous period.
12. The word 'production' cannot be literally interpreted. Every word occurring in a notification must be interpreted in the context in which it occurs keeping in view the scheme and object of that notification. I have therefore no hesitation in rejecting this contention of Sri Bhat.
13. In examining the very notification and rejecting similar objections of the authorities, Chinnappa Reddy, J. (as he then was) has expressed thus in Etikoppaka Co-operative Agricultural Society's case :
'The argument of the counsel for the Central Government was that in order to entitle the manufacturer to the rebate of excise duty he must have produced 'some' sugar during the relevant periods in the base year. Accordingly to him, it was only when some sugar was produced during the relevant period in the year 1972-73, sugar produced during the relevant period in the year 1973-74 could be said to have exceeded the sugar produced during the corresponding period in 1972-73. He drew my attention to the fact that the notification referred to 'quantity' of sugar produced during the corresponding period in 1972-73. If no sugar was produced during the corresponding period in the year 1972-73, his argument was that the notification was inapplicable. This interpretation appears to me to be prima facie unreasonable. 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 interpretation of the Central Government counsel would also lead to absurd results. It would mean that if a manufacturer produced even one ounce of sugar during the relevant period in 1972-73 he would be entitled to rebate, but not if he produced 'nil' sugar. The proviso to the notification, in my opinion, makes matters clear. It says that the exemption mentioned against Sl. Nos. 1 to 4 shall not be admissible to a factory which did not work during the base period. In other words, it was only when a factory did not work at all during 'base period' Base period is defined in the explanation to the notification as the period from 1-10-1972 to 30-9-1973) that the exemptions would not be admissible. The proviso did not make exemptions inadmissible if the factory did not work during the relevant periods mentioned against Sl. Nos. 1 to 4. If the object of the notification was not to grant any exemption in respect of the sugar produced during any one of the four periods mentioned against Sl. Nos. 1 to 4 if no sugar was produced during the corresponding periods in the base year, the proviso to the notification would have been worded differently. In the fact of the proviso, I find it difficult to accept the argument of the learned counsel for the Central Government.'
In my opinion these views expressed by His Lordship are sound and correct and I am in complete agreement with the same.
14. On the correctness of the claim made by the petitioner for May, 1973, there is no controversy between the parties. In this view, it is not necessary to direct the original authority to investigate the claim of the petitioner.
15. On the above discussion, it follows that the application made by the petitioner for incentive rebate has been illegally rejected by the authorities and the same requires to be accepted by this Court, however, reserving them liberty to adjust the amount for any of the amounts that are outstanding to the Central Government under the Act, from the petitioner.
16. In the light of my above discussion, I make the following orders and directions :
(i) I quash the impugned orders :
(ii) I direct respondent No. 2 to allow the application made by the petitioner for incentive rebate for the month of May, 1973 for a sum of Rs. 4,14,600/- with liberty reserved to him to adjust the same for any of the amounts outstanding to Central Government under the Act from the petitioner.
17. Writ petition is disposed of in the above terms. But, in the circumstances of the case, I direct the parties to bear their own costs.