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Janta Cooperative Sugar Mills Ltd. Vs. Union of India (Uoi) and ors. - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Writ No. 2672 of 1980
Judge
Reported in1983(12)ELT334(P& H)
ActsCentral Excise Act, 1944; Essential Commodities Act, 1955 - Sections 3(2); Central Excise Rules, 1944 - Rule 8, 8(1), 53 and 173G
AppellantJanta Cooperative Sugar Mills Ltd.
RespondentUnion of India (Uoi) and ors.
Appellant Advocate R.L. Batta, Adv.
Respondent Advocate Harphool Singh Brar, Adv.
Cases ReferredPondicherry and Anr. v. New Horizon Sugar Mills
Excerpt:
.....a party to do so would amount to placing a premium on the lack of diligence of a party, who is remiss in seeking a remedy that was available to it. therefore, knowledge whether actual or construction of the order passed by the state or regional transport authority should result in commencement of the period of limitation. thus,. in cases where the state or regional transport authority has not communicated the order of refusal passed to the persons concerned, the period of limitation for filing an appeal would commence from the date when the parties concerned acquire knowledge of passing of the said order......description of sugar duty of free sale excise levy no. sugar sugar________________________________________________________________________________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 pro- duction of the corresponding per- iod of the preceding five sugar years in respect of which- (a) the overall production of rs. 60 per rs. 16 per the factory for the entire quintal quintal sugar year does not equal the average production of the preceding five sugar years. (b) the overall production of rs. 82 per rs. 22 per the factory for the entire quintal quintal sugar year equals or exceeds the average production of the.....
Judgment:

J.M. Tandon, J.

1. The Janta Co-operative Sugar Mill Limited Bhogpur, District Jullundur (Petitioner) was established in 1956 and it went into production on January 17, 1957. Sugar is a commodity which falls under the Central Excises and Salt Act, 1944 and excise duty is leviable thereon under item No. 1 of the First Schedule to the Act. However, Rule 8 of the Central Excise Rules, 1944 enables the Government to exempt excisable articles from the payment of duty either wholly or in part. The Government of India issued notification No. 146/74-C.E., dated October 12, 1974, (hereafter the Notification) which reads as follows :

'In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby 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 said Table.

TABLE

________________________________________________________________________________

Sl. Description of sugar Duty of free sale Excise levy

No. sugar sugar

________________________________________________________________________________

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 pro-

duction of the corresponding per-

iod of the preceding five sugar

years in respect of which-

(a) the overall production of Rs. 60 per Rs. 16 per

the factory for the entire quintal quintal

sugar year does not equal

the average production of

the preceding five sugar

years.

(b) the overall production of Rs. 82 per Rs. 22 per

the factory for the entire quintal quintal

sugar year equals or exceeds

the average production of

the preceding five sugar

years.

2. Sugar produced in a factory during

the period commencing on the 1st

December, 1974, and ending with

the 30th September, 1975, which is

in excess of the average production

of the corresponding period of the

preceding five sugar years; that is :

(a) on excess production upto Rs. 20 per Rs. 5 per

7'5 per cent quintal quintal

(b) on excess production on the Rs. 40 per Rs. 10 per

next 10 per cent quintal quintal

(c) on excess production on the Rs. 50 per Rs. 14 per

next 10 per cent quintal quintal

(d) on excess production on the Rs. 60 per Rs. 13 per

next 10 per cent quintal quintal

(e) on excess production beyond Rs. 82 per Rs. 22 per

37.5 per cent quintal quintal

________________________________________________________________________________

Explanation. -In this notification-

(a) 'Average production' in relation to sugar produced in the period by a factory which had gone into production for the first time in 1967-68 or earlier, means the simple average production during the corresponding period of the preceding five sugar years ;

(b) 'free sugar sale' 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 (X of 1955).

(d) 'Sugar year' means the period of 12 months beginning with the 1st day of October and ending with the 30th day of September next following.

2. In computing the production of sugar during the periods mentioned in column (2) of the said Table -

(a) in respect of a factory mentioned in the said table-

(i) the date, as furnished in form R.G. 1 prescribed in Appendix I to the Central Excise Rules, 1944, or in such other record as the Collector may prescribe under Rule 53 or Rule 173G of the said Rules shall be adopted, and

(ii) any sugar obtained by refining gur or khandsari sugar shall not be taken into account ;

(b) in respect of a factory mentioned in serial Numbers 1 and 2 of the said Table-

(i) any sugar obtained by reprocessing of sugar house products left over in process at the end of the base period or earlier shall be taken into account ; and

(ii) any sugar obtained by reprocessing of defective or damaged sugar or brown sugar, if the same has already been included in the quantity of sugar produced, shall not be taken into account.

3. In the case of a factory which had gone to production for the first time after July 19, 1968, the first two years of production shall not be taken into account while computing average production of the preceding five sugar years. Where production in one or more sugar years among five sugar years was nil, the production in such sugar year or sugar years shall be ignored and the average production shall be the average of the production of the corresponding period of the remaining sugar years.

4. Nothing contained in this notification shall apply to a factory which has been producing sugar only for three years or less.'

2. Subsequently, the Government of India issued a Corrigendum to this notification on July 14, 1975. The purpose of the corrigendum was to take away the second sentence in paragraph 3 of the said notification and read it as a separate|paragraph, namely, paragraph 4 and renumber the existing paragraph 4 as paragraph 5.

3. The average annual (sugar year) production of sugar for five sugar years from 1969 to 1973-74 comes to 77229.40 quintals. The production of sugar in the petitioner's mill for the sugar year 1974-75 was 129400 quintals and during the period from 1st October, 1974 to November 30, 1974 was 4101 quintals.

4. The petitioner moved the authorities for rebate on the quantum of sugar produced during the period (October 1, 1974 to November 30, 1974, in terms of paragraph 1(b) of the Notification reproduced above. It was declined by the Assistant Collector vide order dated November 19, 1975 (Annexure P. 3). The petitioner preferred an appeal which was rejected by the Appellate Collector vide order dated August 17, 1976 (Annexure P. 4). The petitioner thereafter filed revision which was dismissed by the Government of India vide order dated December 6, 1979 (Annexure P. 6). The petitioner has assailed the orders Annexures P. 3, P. 4 and P. 6 in the present writ petition.

5. The sugar year as defined in the Notification means the period of 12 months beginning with the first of October and ending with the 30th of September next following. It is not disputed that the average production in the petitioner's mill during the years 1969-70, 1970-71, 1971-72, 1972-73 and 1973-74 was 77229.40 quintals. The petitioner's mill produced no sugar during the period October 1 to November 30 for the years 1969-70, 1970-71 and 1972-73. The production during these two months of 1973-74 was 4387 quintals. The average production of these two months, that is, October and November during the sugar years 1969-70 to 1973-74 comes to a little less than 1000 quintals. The petitioner's mill produced 4101 quintals in October and November, 1974. In view of the fact that the production in the months of October and November, 1974 was in excess of the average production of the corresponding period of the preceding five sugar years and further the overall production of the petitioner's mill for the entire sugar year 1974-75 exceeded the average production of the preceding five sugar year, the petitioner is entitled to rebate in terms of paragraph 1(b) of the Notification.

6. The learned counsel for the Union of India has argued that for determining the average production during the months of October and November of the preceding five sugar years (1969-70 to 1973-74) the sugar years in which the production was nil should be excluded in terms of paragraph No. 4 of the Notification. The argument proceeds that by doing so the average production during the months of October and November for the preceding five sugar years would come to 4837 quintals and the same being in excess of the sugar produced (4101 quintals) in the months of October and November, 1974, the petitioner is not entitled to rebate in terms of the Notification. The contention is fallacious. Paragraph 4 of the Notification relates only to sugar years and it is relevant for the purpose of determining whether a case falls under sub-paragraph (a) or (b) of paragraph 1 of the Notification. Paragraph No. 4 has no relevancy for determining the average production in the months of October and November of the preceding five sugar years, that is, 1969-70 to 1973-74. A similar argument was raised in Assistant Collector of Central Excise, Customs House, Pondicherry and Anr. v. New Horizon Sugar Mills (P) Ltd., Pondicherry 1980 E.L.T. 10 and was repelled. It was held that the expression 'sugar year' as defined in the Explanation 1(d) to the Notification No. 146/74 takes into consideration the twelve months period from the 1st October to the 30th September and not the relevant period of the year. So, when the expression 'sugar years' is used in paragraph 4 of the notification it has to be understood only as defined in para 1(d) of the Explanation and not otherwise. Therefore, to read it not referring to production in 'one or more sugar years' but to the 'relevant period' in 'one or more sugar year' is not sustainable in law.

7. In view of discussion above, it is clear that the petitioner is entitled to rebate on the quantum of sugar (4104 quintals) produced during the period October 1, 1974 to November 30, 1974, in terms of paragraph 1(b) of the Notification. The contrary view taken by the Assistant Collector, the Appellate Collector and the Government of India in orders Annexures P. 3, P. 4 and P. 6 respectively cannot be sustained.

8. In the result, the orders of the Assistant Collector, the Appellate Collector and the Government of India Annexures P. 3, P. 4 and P. 6 are quashed. The authorities are directed to grant rebate to the petitioner to the extent of the quantum of sugar produced in the petitioner's mill during the period October 1, 1974 to November 30, 1974, in terms of paragraph 1(b) of the Notification. No order as to costs.


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