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Kishan Sahkari Chini Mills Ltd. Vs. Union of India (Uoi) and ors. - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtAllahabad High Court
Decided On
Case NumberCivil Misc. Writ No. 310 of 1980
Judge
Reported in1983(14)ELT2255(All)
ActsUttar Pradesh Co-operative Societies Act; Essential Commodities Act, 1955 - Sections 3(2) and 3(3); Additional Duties of Excise (Goods of Special Importance) Act, 1957 - Sections 3(3); Central Excise Rules, 1944 - Rule 8(1); Central Excise Act, 1944; Constitution of India - Articles 134A and 226
AppellantKishan Sahkari Chini Mills Ltd.
RespondentUnion of India (Uoi) and ors.
DispositionPetition dismissed
Excerpt:
- - the government gave certain incentives to new sugar factories which commenced production on or after the 1st of april, 1974. the incentive consisted of certain concessions in excise duty and additional excise duty as well as higher percentage of levy free sugar quota. mentioned earlier, the amount of levy free sugar for a factory like that of the petitioner was 73%. in other words, the quantum of levy sugar which was required to be sold to the government stood at 27%. thus, the petitioner was entitled to sell 73% of its production in open market, 35% out of the same would attract excise duty and additional excise duty at the normal rate whereas the remaining 38% would attract excise duty and additional excise duty at the rate of 15% and 5% respectively and calculated on the price.....a. banerji, j.1. by this writ petition the petitioner seeks appropriate orders directing the respondents 3 to 5 not to impose or realise excise duty and additional excise duty at the rate of 15% and 5% respectively on levy sugar.2. the petitioner is a co-operative sugar factory registered under the provisions of the u.p. co-operative societies act. it carries on the business of manufacture and sale of sugar at rasra, district ballia. petitioner's factory is a new unit and commenced crushing operation in november 1975.3. the government of india announced certain incentives for higher production of sugar in order to achieve production target envisaged in the 5th five year plan period. government orders had been issued for the establishment of the new sugar factories and for effecting.....
Judgment:

A. Banerji, J.

1. By this writ petition the petitioner seeks appropriate orders directing the respondents 3 to 5 not to impose or realise Excise duty and additional Excise duty at the rate of 15% and 5% respectively on Levy sugar.

2. The petitioner is a Co-operative Sugar Factory registered under the provisions of the U.P. Co-operative Societies Act. It carries on the business of manufacture and sale of sugar at Rasra, district Ballia. Petitioner's factory is a new unit and commenced crushing operation in November 1975.

3. The Government of India announced certain incentives for higher production of sugar in order to achieve production target envisaged in the 5th five year plan period. Government Orders had been issued for the establishment of the new sugar factories and for effecting substantial expansion in the existing sugar factories. It was noticed that there had been steep increase in the cost of plant and machinery required for sugar projects and it was found that the new projects were not proving economically viable units. By the aforesaid G.O. the Government gave certain incentives to new sugar factories which commenced production on or after the 1st of April, 1974. The incentive consisted of certain concessions in excise duty and additional excise duty as well as higher percentage of levy free sugar quota. It was also indicated in the above G.O. that in regard to excise duty necessary notification would be issued by the Ministry of Agriculture and Irrigation, Department of Food, Directorate of Sugar and Vanaspati, Krishi Bhavan, New Delhi separately. In pursuance of this the Government issued a Notification No. 35/76-C.E., dated 26th April, 1976, By this notification the sugar produced in excess of 35% of its production would be subjected to Excise duty and additional Excise duty at the rate of 15% and 5% respectively on the price determined by the Government from time to time in respect of sugar which was required to be sold under Section 3(2)(f) of the Essential Commodities Act, known as Levy sugar,

4. It may be stated here that the scheme as envisaged by the G.O. mentioned earlier, the amount of levy free sugar for a factory like that of the petitioner was 73%. In other words, the quantum of Levy sugar which was required to be sold to the Government stood at 27%. Thus, the petitioner was entitled to sell 73% of its production in open market, 35% out of the same would attract Excise duty and additional Excise duty at the normal rate whereas the remaining 38% would attract Excise duty and additional Excise duty at the rate of 15% and 5% respectively and calculated on the price payable as in the case of Levy sugar.

5. The Government of India from time to time modified the rates of Excise duty and additional Excise duty payable on sugar which was required to be sold to the Central Government (levy sugar) under Section 3(2)(f) of the Essential Commodities Act. Such Notifications were :

Notification Nos. : -

(1) 223/76 dated the 3rd August, 1976

(2) 226/76 dated the 6th August, 1976

(3) 251/76 dated the 14th September, 1976

(4) 254/76 dated the 21st September, 1976

(5) 279/76 dated the 22nd November, 1976

(6) 317/77 dated the 16th November, 1977

(7) 81/78 dated the 15 March, 1978

(8) 152/78 dated the 16th August, 1978.

6. The petitioner's case is that the factory started production after the 1st April, 1974 and was entitled to the benefit of the scheme proposed by the Government as contained in Notification No. 35/76 and was, also entitled to the benefit of the Excise Duty and Additional Excise Duty payable on Levy sugar as modified from time to time by the aforementioned Notifications. The petitioner's case further was that the certificate of eligibility had been obtained from Respondent No. 2 for the three years. However, the audit party of the Government raised an objection as to the amount of Excise Duty and Additional Excise Duty payable on Levy sugar by the petitioner. The Respondent No. 4 had sent a notice dated the 8th March, 1979 to the petitioner to produce all the relevant documents viz., the final certificate issued by the respondent no. 2. The petitioner was also asked to show cause as to why the sum of Rs. 6,25,973.63 may not be recovered as a difference payable by the petitioner. The petitioner thereafter made a request to the Directorate of Sugar and Vanaspati, New Delhi, to issue certificates. The matter remained pending there. Meanwhile a demand notice dated the 18th May, 1979 asking the petitioner to pay the sum of Rs. 6,25,973.63 paise was issued. The petitioner thereafter by a letter dated 2-6-1979 intimated the respondents 3, 4 and 5 that respondent No. 2 was not in a position to issue a final incentive entitlement certificate as the latter was busy in finalising the incentive scheme for the years 1977-78 and 1978-79. The petitioner received another notice on 14th June, 1979 from the Superintendent, Central Excise, Mau, district Azamgarh that the demand of short levy of Central Excise duty has been correctly made. The petitioner in his reply pointed out that he was under no liability to pay the basic and additional Excise duty at the rate of 15% and 5%. The petitioner pointed out that he had charged basic and additional Excise duty from the Food Corporation of India at the prescribed rates fixed by the Government of India on Levy sugar and paid to respondents 3 to 5. It was further stated that the Levy sugar attracted Excise duty @ 10% and 5%, 7% and 5% and 6% and 5% for different years and such sugar could not be subjected to higher rate of basic and additional Excise duty. For the amount of 38% of the production of sugar which was covered by the notification dated 26th February, 1976 full Excise duty had been paid @ 15% plus 5% basic and additional Excise duty. The petitioner was thereafter served with an order dated 9-5-1980 whereby he was required to pay a sum of Rs. 6,10,868.89 P. as difference in Central Excise duty in respect of 16,947 quintals of sugar.

7. The petitioner is aggrieved by the above order and has approached this Court under Article 226 of the Constitution and has prayed for quashing the above order dated 9th May, 1980 (Annexure 12 to the writ petition) and has also prayed for a writ of mandamus or order commanding the respondents 3 to 5 not to enforce the impugned order dated 9th May, 1980. The petitioner has also prayed for a suitable writ, order or direction commanding the respondents not to enforce the rate of basic and additional Excise duty @ 15% and 5% respectively in terms of Notification No. 33/76 dated 26th February, 1976 in respect of 27% of the production of sugar supplied as Levy quota to the nominee of the Government of India under Section 3(2)(f) of the Essential Commodities Act.

8. Learned counsel for the petitioner stated that the dispute in the present case pertained to the rate of Excise duty and additional Excise duty on the Levy sugar. According to him the rates which were originally 15% and 5% respectively were reduced from time to time vide aforementioned notifications. Consequently, the petitioner was not liable to pay the amount under demand vide Annexure 12, as the requisite amount of Excise duty and additional Excise duty, both had been paid. The petitioner's case further was that the Notification dated 26th February, 1976 had been misinterpreted by the respondents 3 to 5 and they were making an illegal demand for payment of the sum demanded.

9. The case of the respondents on the other hand is that the petitioner has been misinterpreting the Notification No. 35/76 dated 26th February, 1976. The petitioner was liable to pay the Excise duty and additional Excise duty @ 15% and 5% respectively on the Levy sugar and there was no change in the rates as regards the same. Consequently, the demand made by respondents 3 to 5 was in accordance with law and justified.

10. In order to understand and appreciate the arguments raised at the Bar it was necessary to pursue all the relevant Notifications mentioned above. Except the Notification No. 223/76 dated 3rd August, 1976 copies of the other notifications were supplied to the Court by the learned counsel. We have perused the notification dated 3rd August, 1976 as published on page 528 in the book 'Cooperative Sugar Directory and Year Book, 1977' issued by the National Federation of Cooperative Sugar Factories Ltd., New Delhi.

11. It will be necessary in this case to refer to the G.O. dated 6th December, 1975 and to the various notifications to find out what exactly was Intended by the Government in regard to the payment of basic Excise duty and the additional Excise duty. By the G.O. No. P. 27 (6)/75-ST/Government of India, Ministry of Agriculture and Irrigation, Department of Food, Directorate of Sugar & Vanaspati, Krishi Bhawan, New Delhi dated the 6th December, 1975, addressed to all the sugar factories enumerating the scheme 'Incentives for new sugar factories and expansion projects established at high cost to make them economically viable units'. In this letter it was made clear that in order to achieve the targetted production envisaged in the 5th Five Year Plan period licences had been issued for the establishment of new sugar factories and for effecting the substantial expansion in the existing sugar factories. It was noticed that there had been a steep increase in the cost of plant and machinery required for the sugar projects and at this high cost the new projects were not proving economically viable units. The Government had constituted a committee to examine these matters and suggest various incentives and other measures for making the new sugar factories and expansion cases economically viable units. After examining the recommendations of the committee the Government had approved of the following scheme :

(i) The period of operation of the scheme is to be 5 years from the date of commencement of production in each of the new sugar factories.

(ii) The country had been divided into three sugar producing zones namely, (a) low recovery area, (b) medium recovery area and (c) high recovery area. This classification was made on the basis of average recovery of sugar during the previous 5 seasons preceding the 1975-76 session. If the average was less than 9% during the aforementioned period, it would be a low recovery area ; if it was above 9% but below 10%, a medium recovery area; and if it was more than 10% then it was a high recovery area.

(iii) The incentives would be effective from the 1st November, 1975 and apply to all units commencing production during the period between the above date and 31st October, 1980. It was also made clear that the new units which commenced production after the 1st April, 1974 (the commencement of the Fifth Plan) and before 1st November,, 1975 will be eligible for the incentives. It was also made clear that the concessions would apply for the balance of the five year period from the date of commissioning.

(iv) These incentives were linked to actual cost of 1,250 tonnes standard plant as prescribed by the Government of India (excluding the 18 optional items of machinery) on f.o.r. basis i.e. excluding freight, insurance, octroi, sales tax and erection charges. The concessions were made available when the f.o.r. cost of plant and machinery was above Rs. 200 lakhs, subject to a maximum of Rs. 400 lakhs. The incentives were not made applicable to a plant in which the f.o.r. cost of the plant and machinery was below Rs. 200 lakhs. ,

(v) The percentage of levy free quota of sugar for different slabs of the f.o.r. cost of plant and machinery and for low, medium and high recovery areas were mentioned in the Appendix 1.

(vi) 'In spite of the higher free sale quotas allowed, the new sugar factories will be required to pay excise duty in accordance with the normal rates applicable to the existing units on the basis of 65 to 35 ratio of levy and free sale sugar.'

The remaining part of the letter dealt with incentives for expansion schemes in respect of existing sugar factories in which there was a licence for expansion projects. It is, however, not necessary to reproduce the m for the petitioner's factory is admittedly a new sugar factory which has commenced production after the 1st April, 1974.

12. Paragraph 6 of the letter is relevant and may be re-produced :

'6. In regard to the excise duty concessions available under this scheme, the necessary Notification would be issued by the Ministry of Finance (Department of Revenue & Insurance) separately.'

13. A reference may be made to Appendix I to the above letter which indicated the percentage of free quota for different slabs of plant and machinery cost. Admittedly the cost of the plant and machinary f.o.r. of the petitioner's factory was between Rs. 220 to 240 lakhs.

(Percentage of free quota sugar (medium recovery zone)For a factory the cost of plant and machinery 1st Year 2nd Year 3rd Year 4th Year 5thYear f.o.r. was between Rs. 73 73 73 57 45 220 to 240 lakhs.

14. This indicates the amount of sugar that was to be treated as free sale sugar or free quota sugar. In other words, sugar factories which commenced production for the first time on or after the 1st April, 1974, and was situated in a medium recovery zone and had invested between Rs. 220 to Rs. 240 lakhs in the plant and machinery f.o.r. would have 73 per cent of the production available to it for sale in the free or open market. It further meant that only 27 per cent of the sugar produced by such sugar factories would be Levy sugar. The scheme further indicated that this percentage of free sale sugar would be 73 per cent of the first three years of its production and thereafter get reduced to 57 per cent and in the fifth year, further reduced to 45 per cent. The Scheme gave this benefit for five years in all.

15. The first Notification published or issued to give effect to the scheme aforesaid is numbered as 35/76-C.E. and is dated the 26th February, 1976. This was issued by the Ministry of Finance (Department of Revenue & Insurance). This Notification (hereinafter referred to as No. 35/76) fixed the Excise duty and Additional Excise duty on sugar produced by such a factory which was in excess of 35 per cent of its production in a sugar year, at 15 per cent and 5 per cent respectively, and further stipulated that the said duties would be calculated on the price payable for Levy sugar under Section 3(3c) of the Essential Commodities Act, 1955. The proviso to the Notification made it clear that nothing contained in the Notification No. 210/73-Central Excises, dated the 15th December, 1973 shall apply to a sugar factory covered by the Notification No. 35/76.

16. Reference may therefore be made to the aforementioned Notification No. 210/73, issued by the Vitta Mantralaya (Rajaswa aur Bima Vibhag), New Delhi. This Notification specifies the quantum of Excise Duty and Additional Excise Duty to be paid on sugar required to be sold to the Central Government under Section 3(2)(f) of the Essential Commodities Act. The rate specified was 15 per cent and 5 per cent respectively. This duty and additional duty was to be paid on the price of sugar payable to the producer, by the Central Government from time to time, under Section 3(3c) of the said Essential Commodities Act. In other words, the Central Government determined the rates of duty to be paid on Levy sugar. This Notification was applicable to all sugar factories, then existing. But it was specifically not made applicable to the sugar factories covered by the Notification No. 35/76.

17. Reference may now be made to the above mentioned Notification No. 36/76. It will be better to reproduce the contents, as its interpretation was the subject of much arguments.

'G.S.R. 4(E).-In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 read with Sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) the Central Government hereby exempts sugar, falling under sub-item (1) of Item No. 1 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) and produced by a sugar factory, commences production for the first time on or after the 1st day of April, 1974, and which is in excess of thirty-five per cent of its production in a sugar year, from so much of the duty of excise leviable thereon as is in excess of duty calculated at 15 per cent and 5 per cent, respectively, on the basis of price determined by the Central Government, from time to time, under Sub-section (3c) of Section 3 of the Essential Commodities Act, 1955 (10 of 1955) for Levy sugar subject to the condition that a certificate is produced from the Chief Director, Directorate of Sugar & Vanaspati regarding the eligibility of the sugar factory to avail of the exemption under this Notification :-

Provided that nothing contained in the Notification of the Government of India in the Ministry of Finance (Department of Revenue & Insurance) No. 210/73-Central Excises, dated the 15th December, 1973, shall apply to a sugar factory covered by this Notification.

Explanation.-In this Notification : -

(a) 'Levy sugar' means sugar required by the Central Government to be sold under clause (i) of Sub-section (2) of Section 3 of the Essential Commodities Act, 1955 (10 of 1955).

(b) '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.'

(No. 35/76-C.E.) Sd. G.S. Maingi, Under Secretary.

A persual of this Notification shows that the Central Government commenced production for the first time on or after the first day of April, 1974. It stipulated that there would be an exemption in the payment of Excise duty and additional Excise duty in excess of the rate of 15 per cent and 5 per cent respectively on the price payable for sugar required to be sold to the Central Government, which is in excess of 35 per cent of its production in a sugar year. In other words, the said duty and additional duty would be payable on sugar which was in excess of 35 per cent of its production in a sugar year. It also provided that this duty would be calculated at the above-mentioned rate on the basis of the price determined by the Central Government from time to time as in the case of Levy sugar. A condition was attached that a certificate had to be produced from the Chief Director, Directorate of Sugar & Vanaspati regarding the eligibility of the sugar factory to avail of the exemption under this notification. The proviso appended is important.

18. It is apparent from the above that this notification envisages benefits to be given to sugar factores which started production on or after 1st April, 1974. Fora factory of the type and situation as that of the petitioner all the sugar produced by it in excess of 35% of its production in a sugar year would be liable to a lower rate of duty and that too calculated on a price as payable for Levy sugar by the Government.

19. There is no dispute that the percentage of sugar produced in a sugar year, which had to be sold to the Central Government under Section 3(2)(f) of the Essential Commodities Act during the relevant period, was 27 per cent. In other words, the quantity of sugar which had to be sold to the Central Government was 27% of the production. It would be obvious from the above that after selling the Levy sugar to the Central Government and 35% of the production as free sale sugar, mentioned above, there would be the balance of 38% of the production. Under notification No. 35/76-C.E. 38% of the sugar produced in the relevant sugar year was available for sale by the factory in the free market. Thus a sugar factory which commenced production after 1st April, 1974 could dispose of in open market 73 per cent of its total production in a sugar year. Thirty-five per cent of this could be sold by the sugar factory after paying normal Excise duty and additional Excise duty. The remaining 38%, however, was entitled, under this notification, to certain benefits. The benefit was the Excise duty and additional Excise duty on this quantity could be calculated @ 15% and 5% respectively in respect of the normal rate of Excise duty and additional Excise duty, and that too on a price which was the price fixed for the Levy sugar by the Government from time to time. In other words, the benefit was two-fold. Firstly, there was a reduction in the rate of Excise duty and additional Excise duty on 38% of the production. Further, the duties would be payable on the price determined for the Levy sugar by the Government from time to time. The sugar factory would however be free to sell this sugar in open market at the prevailing or available price. Thus a factory which came into production after 1st April, 1974 was entitled to substantial benefits under this notification.

20. It would, however, be noticed that the proviso to this notification makes it clear that nothing contained in the notification No. 210/73 would have any application to a sugar factory covered by this notification. The effect of this proviso is that whatever was stipulated in the Notification No. 35/76 would not be affected by the Notification No. 210/73. We have already examined the Notification No. 210/73. It stipulated the payment of Excise duty and additional Excise duty @ 15% and 5% respectively on the price determined by the Government from time to time on the price paid for Levy sugar. In other words, the duty payable on Levy sugar under the Notification No. 35/76 remained unaffected by this notification. Since the provisions of Notification No. 210/73 had no application to the provisions of Notification No. 35/76, the duty on Levy sugar payable by a sugar factory commencing production for the first time on or after 1-4-1974 remained unaffected.

21. Learned counsel for the petitioner strenuously urged that the rates of Excise duty and additional Excise duty given in the Notification No. 35/76 (15% & 5%) applied only to that part of the sugar which was in excess of the first 35% and 27% of the production which was required to be sold to the Government as Levy sugar. In other words, production of sugar in excess of 62% would attract the Excise duty at 15% and additional Excise duty at 5% throughout the period unless changed or modified by subsequent notifications. Since there was no such modification, the petitioner had paid excise duty and additional excise duty merely on this part of the production, but in regard to Levy sugar, the excise duty having been reduced from time to time by the Government, the petitioner was not liable to pay excise duty and additional excise duty at 15% and 5%. He urged that the intendment was to reduce the rate of excise duty and additional excise duty on Levy sugar and the petitioner was entitled to the same benefit,-

22. We are unable to accept this contention. The Notification No. 35/76 specifically provided some reliefs to a particular class of sugar factories in order to enable them to increase their production of sugar in a sugar year. The notification provided a consolidated scheme for such sugar factories. Presumably, the Government did not intend to give any more benefits to such factories. Three-fold benefits included larger quantum of free sale sugar to the sugar factory, lesser rate of Excise and Additional Excise duty on a part of the free sale sugar and thirdly, the realisation of excise duty o n such sugar at a price which was fixed by the Government for Levy sugar. Th notification made it clear that the excise duty and additional excise but would be based on the price, which the Government would fix for sugay which was required to be sold to the Government, i.e., levy sugar. This price would vary from time to time and this too was indicated in the notification But with regard to the Excise Duty and Additional Excise Duty on Levy sugar the notification indicated no such variance. On the contrary the proviso made it clear that nothing in the previous Notification No. 210/73 would be attracted to this notification. That notification dealt with the rate of Excise Duty and Additional Excise Duty on Levy sugar.

23. In our view, until the Notification No. 35/76 was superseded or the scheme was modified by the subsequent notification, there could be no change either in the percentage of free sale sugar or in the rate of excise and additional excise duty payable on such sugar by the sugar factories which commenced production for the first time on or after the 1st of April, 1974.

24. Let us now examine the subsequent notifications brought to our notice to see if the Notification No. 35/76 dated the 26th February, 1976 has been superseded or modified in any respect. The question is whether the field occupied by the Notification No. 35/76 has been intruded upon in any way by the following notifications.

25. Notification No. 223/76 dated the 3rd August, 1976 superseded the Notification No. 210/73 dated the 15th December, 1973 and reduced the Excise duty and additional Excise duty leviable on sugar liable to be sold to the Central Government under Section 3(2)(f) of the Essential Commodities Act. This notification was to remain in force upto the 30th of September, 1976. Its duration was, therefore, a limited one viz from 3-8-1976 to 30-9-1976. This notification purported to reduce the rates of Excise duty and additional Excise duty from 15% and 5% respectively to 10% and 5% respectively on Levy sugar. This notification makes no mention of the sugar factories which came in operation for the first time on or after the 1st of April, 1974. It will be relevant to notice that this notification makes no mention of Notification No. 35/76. It may further be stated that Notification No. 210/73 applied to sugar factories which had commenced their production prior to 1st of April, 1974. Similarly, the Notification No. 223/76 dated the 3rd August, 1976 would, therefore, apply to those sugar factories which had started production prior to 1st of April, 1974.

26. Another Notification No. 226/76 is dated the 6th of August, 1976. By this notification the previous Notification No. 223/76 was superseded in respect of the sugar produced on or after the commencement of the notification dated the 6th of August, 1976, but before the first day of October, 1976, and the rate of Excise duty and Additional Excise duty on Levy sugar was fixed at 10% and 5% respectively. The same observations as regards the previous notification will be applicable to this notification as well.

27. The next notification is numbered 251/76 and is dated the 14th September, 1976. This notification superseded the previous Notification No. 226/76. This notification is in the same lines as the previous Notification, but its period was from 1st October, 1975 to 30th September, 1976 and the rate of Excise duty and additional Excise duty was fixed at 10% and 5% respectively. The same observations would be applicable to this notification as in the case of Notification No. 223/76.

28. Seven days later the Central Government issued yet another notification No. 254/76 on the same lines. The Central Government once again revised the rates of Excise duty and additional Excise duty leviable on sugar required to be sold to the Central Government as Levy sugar. The rate of Excise duty and additional Excise duty leviable was 15% and 5% on the price determined by the Central Government. The second proviso to this notification lays down that nothing contained in the Notification No. 251/76 shall apply to the sugar covered by this notification. A comparison of the Notification (No. 254/76) with Notification No. 210/73 shows the use of almost the same words. It is obvious from this that this notification only provided for a new rate of Excise duty and additional Excise duty payable on Levy sugar. This notification was published in the Gazette Extraordinary on 21st September, 1976. Notification No. 251/76 dated 14th September, 1976 was for the period 1st October, 1975 to 30th September, 1976. This notification, therefore, imposed a fresh rate of Excise duty and additional Excise duty on Levy sugar produced during different periods. This notification has neither referred to the Notification No. 35/76 nor says anything about sugar produced by sugar factories which came into production after 1st April, 1974.

29. Thereafter another Notification No. 279/76 was issued on 22nd November, 1976. This laid down the rate of Excise duty and additional Excise duty leviable on a sugar produced between the period 1-10-1976 to 30th September 1977. This again levied Excise duty and additional Excise duty @ 10% and 5% respectively but the second Explanation made it clear that nothing contained in this notification shall affect the previous notifications of the Government of India No. 251/76 and 254/76. Since the earlier Notification No. 254/76 fixed the rate of Excise duty and additional Excise duty on Levy sugar at 15% and 5% this Notification No. 279/76 would have no application.

30. The next notification is numbered 317/77 and is dated the 16th of November, 1977. This superseded the previous Notification Nos. 251/76, 254/76 and 279/76 and the rates of Excise duty and additional Excise duty of 71/2% and 5% respectively on the basis of the price determined by the Central Government under Section 3(3C) of the Essential Commodities Act. This notification was to be effective until 30th of September, 1978. Since this notification superseded the earlier Notification Nos. 251/76, 254/76 and 279/76, it purports to change the rate of duties on Levy sugar.

31. The next Notification No. 81/78 dated the 15th March, 1978 merely sought to amend the rate from 71/2% to 6% in the matter of Excise duty.

32. Another Notification No. 153/78 dated the 16th August, 1978 was issued subsequently. This notification amended the rate of Excise duty and additional Excise duty to 11% and 6% respectively on Levy sugar.

33. As seen above, all these Notification Nos. 223/76, 226/76, 251/76, 254/76, 279/76, 317/77, 81/78 and 153/78 purported to amend the rate of Excise duty and additional Excise duty on Levy sugar from time to time. All these notifications purported to cover the same field as was covered by the Notification No. 210/73. In none of these notifications any attempt or effort was made to modify or supersede the Notification No. 35/76. As a matter of fact, it has been seen in the proviso to Notification No. 35/76 that the terms in the notification No. 210/73 were not made applicable to the later Notification No. 35/76. Since none of these notifications from 223/76 to 153/78 refer at all to the Notification No. 35/76, none of these notifications therefore have any effect on the Notification No. 35/76.

34. As already indicated earlier in this judgment that the Notification No. 35/76 provided a consolidated scheme of benefits for sugar factories which had commenced production on or after the 1st of April, 1974, the excise duty and additional excise duty had been fixed at 15% and 5% respectively on Levy sugar. The same rate would be applicable to 38% of the sugar which was permitted to be sold as free sale sugar, on the same price as in the case of Levy sugar, which was to be determined by the Central Government from time to time. Unless there was a specific change to the rates contained in Notification No. 35/76, the same rates would prevail, for it was a part of incentive package. Since none of the subsequent notifications issued by the Central Government sought to change or amend the rates mentioned in Notification No. 35/76, the same rates would prevail until changed by a notification. The contention that the rates of Excise duty and additional Excise duty on the Levy sugar imposed by the Central Government from time to time by various notifications issued subsequently would not be applicable, for these rates of Excise duty and additional Excise duty on Levy sugar pertained to all other sugar factories except those which were covered under Notification No. 35/76 has no merits at all. We find no substance in any of the contentions raised by the learned counsel for the petitioner. No other point was urged.

35. In the result, the writ petition fails and is dismissed with costs.

36. While we were delivering judgment in this case Shri Awasthi, learned counsel for the petitioner prayed for a certificate under Article 134A of the Constitution so as to enable him to go up in appeal to the Supreme Court. Having heard Shri Awasthi we are not satisfied that the proposed appeal to the Supreme Court involves any substantial question of law of general importance or that the question raised in the case needs to be decided by the Supreme Court. The prayer for the certificate made by Shri Awasthi is accordingly rejected.


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