Skip to content


Triveni Engineering Works Ltd. and anr. Vs. Union of India (Uoi) and ors. - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtDelhi High Court
Decided On
Case NumberCivil Writ Petition No. 1299 of 1979
Judge
Reported in1984(18)ELT729(Del)
ActsCentral Excises Act, 1944; Constitution of India - Article 226; Central Excise Rules, 1944 - Rule 8(1)
AppellantTriveni Engineering Works Ltd. and anr.
RespondentUnion of India (Uoi) and ors.
Appellant Advocate Ravinder Narain,; T.M. Ansari and; Aditya Narain, Advs
Respondent Advocate D.K. Kapur, Adv.
Cases ReferredMfs. Challapalli Sugar Ltd. v. The Union of India and Ors.
Excerpt:
- .....1974 in excess of the average production of the corresponding period of the preceding five sugar years in respect of which;- 1(a) the overall production of the rs. 60/- rs. 16/- factory for the entire sugar year per quintal per quintal does not equal the average rs. 82/- rs. 22/- production of the preceding five per quintal per quintal sugar years.(b) the overall production of the factory for the entire sugar years equals or exceeds the average production of the preceding five sugar years.2. sugar produced in a factory the period commencing on the 1st day of december, 1974, and ending with the 30th day of 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 up to 7.5%. rs......
Judgment:

R.N. Aggarwal, J.

1. This petition under Article 226 of the Constitution of India involves the question of interpretation to be placed on the notification dated 12th October 1974, a copy of which has been filed as Annexure'A' by which the Government of India, in exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 granted certain exemptions in regard to sugar. The notification is as follows.

NOTIFICATION

Central Excise

G.S.R.-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 livable thereon as is specified in the corresponding entry in columns (3) and (4) of the said Table.

TABLE

---------------------------------------------------------------------------------

Sl. Description of Sugar Duty of Excise

No. ----------------------------------

Free Sale Sugar Levy Sugar

(1) (2) (3) (4)

---------------------------------------------------------------------------------

'1.Sugar produced in factory

during the period commencing

on the first day of October, 1974

and ending with 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;- 1

(a) The overall production of the Rs. 60/- Rs. 16/-

factory for the entire sugar year per quintal per quintal

does not equal the average Rs. 82/- Rs. 22/-

production of the preceding five per quintal per quintal

sugar years.

(b) The overall production of the

factory for the entire sugar

years equals or exceeds the

average production of the

preceding five sugar years.

2. Sugar produced in a factory the

period commencing on the 1st day

of December, 1974, and ending

with the 30th day of 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 up to 7.5%. Rs. 20/- Rs. 5/-

per quintal per quintal

(b) On excess production on the Rs. 40/- Rs. 10/-

next 10%. per quintal per quintal

(c) On excess production on the Rs. 50/- Rs. 14/-

next 10%. per quintal per quintal

(d) On excess production on the Rs. 60/- Rs. 18/-

next 10%. per quintal per quintal

(e) On excess production beyond 37.5%. Rs. 82/- Rs. 22/-

---------------------------------------------------------------------------------

x x x x x'

2. The petitioner-company is engaged in the manufacture and sale of sugar and has its sugar mills at Khatauli, District Muzaffarnagar. U.P. The petitioner in the relevant year, that is, year commencing on 1st December, 1974 and ending with 30th September, 1975 filed a claim of rebate of excise duty for a sum of Rs. 5,52,205/-. The said claim was revised and an amended claim of Rs. 13,44,053.34 was filed on 16th December, 1975. The Collector of Central Excise, Kanpur vide letter dated 17th July, 1976, informed the petitioner that it had been sanctioned rebate pursuant to the notification dated 12th October, 1974 for Rs. 5,52,264.

3. The contention of the petitioner is that the percentage of rebate envisaged in Seriall No. 2 of the notification has to be worked out with reference to the actual excess production and not with reference to the production of the corresponding period of preceding five sugar years. The contention of the respondents is that the rebate is calculable on the basis of percentage of average production of the previous five years and not on the basis contended to by the petitioner.

4. The said notification has been the subject of the judicial interpretation. In India Sugar & Refineries Ltd., Hospet v. Union of India and Ors. 1983 ELT 209, a Single Judge of the Karnataka High Court held as under :

'Since the notification dated 12-10-1974 prescribed slabs in accordance with which reb ate had to be allowed, thereforee, the rebate was calculable in regard to the percentage of the excess production during the relevant year and not in regard to the percentage of average production of the previous five years.'

5. In Sakthi Sugar Limited, Coimbatore v. Union of India and Ors., 1983 E.L.T. 484, a Single Judge of the Madras High Court observed:

'The expression 'on excess production up to 7.5% and 'on excess production on the next 10% means, 7.5% of the excess production, the next 10% of the excess production and not 7.5% or next 10% of the average production. To illustrate if the average production in the previous five years was 1000 quintals and the excess production to the particular year over that average production is 2000 quintals, the 7.5% of the excess production would be 150 quintals and not 75 quintals as claimed by the excise authorities. The interpretation adopted by excise authorities is possible only if the words 'of the average production' are added to the different percentages mentioned in relevant Notifications, in Item 2 of the Notification dated 12-10-1974.'

6. In Pravara Sahakari Sakhar Karkhana Ltd. v. Union of India and Ors., 1984 Excise & Customs Reporter page 59, a Division Bench of the Bombay High Court held as under :

'On a plain reading of the Notification, the petitioner is entitled to claim rebate on the entire excess production over the average as provided by Item No. 2 in Column (2) of the Notification.

It is not permissible for the Courts to ignore the interpretations which is in favor of the tax payer by entering upon the inquiry as to what the Legislature had in mind while publishing the Notification. Whatever may be the intention of the Government in issuing the Notification, if the words in the Notification are clear, then the citizen is entitled to take advantage of the same..in the present case it is impossible to hold that two interpretation are possible while construing Item No. 2 in Column (2) of the Notification. The only interpretation possible is that the producers are entitled to the rebate on entire production in excess of the average production of the corresponding five sugar years. As no other interpretation is possible, it is essential that we must exercise the jurisdiction and correct the error which is apparent on the face of record.'

7. The Andhra Pradesh High Court in Writ Petition No. 4039 of 1976 {Mfs. Challapalli Sugar Ltd. v. The Union of India and Ors.) decided on 16th February, 1978 took a contrary view.

It have carefully gone through the cited authorities and I am inclined to agree with the view taken by the Bombay High Court in M/s. Pravara Sahakari Sakhar Karkhana Ltd. (Supra).

8. Shri D.K. Kapur, learned counsel for the respondents, has brought to my notice that the Ministry of Finance has filed Special Leave Petition in the Supreme Court of India against the judgment in the case M/s. Pravara Sahkari Sakhar Karkhana Ltd. and also in some other cases involving the same issue. Mr. Kapur has, with his usual fairness, pointed out that in the case of Paravara Sahkari Sakhar Karkhana Ltd. the prayer for stay was refused by the Supreme Court. I find no valid reason to postpone the decision of this writ petition. In case the respondents are dissatisfied with the decision they can go further in appeal.

9. Agreeing with the view expressed by the Bombay High Court, the Karnataka High Court and the Madras High Court, I allow the petition and direct the respondents to allow rebate to the petitioner calculated on the basis of actual excess production and not with reference to the average production of the corresponding period of preceding five sugar years. The petition is disposed of accordingly. The parties are left to bear their own costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //