IMPORTANT POINT
The Tribunal has correctly considered the rebate claim of the appellant.

Headnote:Central Excise Rules, 1944-Rule 8(1)-Rebate notification No. 135/83-CE dt. 30.4.1983 under-Exemption to excess production of sugar during 1.5.83 to 30.9.83-Dispute relating to method of calculation of average production of sugar in "any of the three sugar years 1979-80, 1980-81 and 1981-82"-No production in two of the three years-Whether average has to be production of one year only or by dividing the production of one year by three-Meaning of the word `any -Tribunal holding former-Appeal against -Whether Tribunal was right? (Yes)-Appeal dismissed.
       Held : Clause 3 provides that period in which there is nil production has to be ignored while arriving at average production of the three sugar years. As there was no production in the two years, the period of two years has to be ignored for the purposes of calculating average production. Average production is to be arrived at notwithstanding that only one year out of three preceding years is left for working out average. The use of the word any in clause 3 in the context of the notification has to be interpreted to mean in one or two years. Average production of the three preceding years where there was no production in two of the three preceding years cannot be arrived at by dividing the production of one year by three. Had that been the intention then it would not have been provided in clause 3 that the period in which there was no production is to be ignored. The use of the words any of the three sugar years and then the words the average production of Sugar years of 1979-80, 1980-81 and 1981-82 for the purpose of the notification be determined by taking into account only such of the period of which sugar was produced coupled with the words the period in which sugar was not produced therein shall be ignored clearly indicates the intention that average production has to be arrived at by ignoring the period in which there was no production irrespective of the fact whether the period to be ignored is of one or two years. Clause 4 operates where there was nil production in all the three preceding sugar years. We can not assume that the Central Government was not conscious of the fact that production could have been only in one of the three preceding sugar years and did not provide to meet such a situation. Clause 3 governs the situation where there is a production in one or more than one year and average production of three preceding sugar years arrived at by ignoring the period in which there was no production while calculating the average production. In our view, the Tribunal has correctly considered the rebate claim arising out of the three base years. Appellant had manufactured sugar between 1st May, 1979 to 30th September, 1979 only and since there was no production in the two periods, i.e., 1980-81 and 1981-82 the same are to be ignored and the sugar produced in the year 1979-80 would be taken to be the average for all the three years for determining the average production. In a case of factory where there was no production in any of the three years during the lean period then the sugar produced between 1st May, 1983 to 30th September, 1983 was to be taken as the average production for exemption from the payment of excise duty. In cases where there was a production in any of the three preceding years then the average had to be calculated by ignoring the periods in which there was no production. Since in this case there is no production in two out of the three years the average has to be the production in one year only. (Paras 11 and 12)
       Held consequently : For the reasons stated above, we do not find any merit in these appeals and dismiss the same with no order as to costs. (Para 14)

JUDGMENT

Bhan, J.-In these appeals the dispute relates to the method of calculation of average production of sugar for the purpose of grant of central excise concession in terms of the exemption Notification No.135/83- CE dated 30th April, 1983.

2. In these appeals the point of law is common and the facts are similar. Facts are narrated from Civil Appeal No. 6634 of 1995 being illustrative.

3. Sahyadri Sahakari Sakhar Karkhana Limited, District Satara (hereinafter referred to as the appellant ) is a registered co-operative Society, registered under the Maharashtra Co-operative Societies Act, 1960. It is carrying on the business of manufacturing sugar under tariff item No. 17.01 under the Central Excise Tariff Act, 1985. It is holding a registration in terms of Rule 174 of the Central Excise Act, 1944 and Central Excise Rules, 1944 (hereinafter referred to as the Act & Rules, respectively ).

4. Government of India issued a rebate notification No. 135/83 dated 30th April, 1983 with the intention to take more production of sugar in the lean period of the sugar year 1982-83. The sugar year starts on 1st October and ends on 30th September each year. Normally sugar production season commences in November of each year and continues for six months, i.e., up to April next year. The incentive period from 1.5.1983 to 30.9.1983 in terms of the relevant notification No. 135/83 comes during the lean period (off season of the sugar year). In order to induce a sugar factory to produce more sugar, during the off season period, this incentive was given by way of rebate (refund) of central excise duties. The rebate was given on excess production of sugar produced during the incentive period as per notification cm the basis of average production during the lean period of three preceding Sugar years 1979-80, 1980-81 and 1981-82. The excess production in this incentive period had to be worked out in terms of the notification. Relevant portion of the notification reads as under:

"Exemption to excess production during 1.5.1983 to 30.9.1983 - 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 (1) of the Table and falling under sub-item of the First Schedule to the Central Excise & Salt Act, 1944 (1 of 44), from so much of the duty of excise leviable thereon under the said Act at the rate specified in the said First Schedule in the corresponding entry in columns (2) and (3) of the said Table:

TABLE

Description of Duty of Excise Levy Sugar Free sale Sugar Sugar

(1) (2) (3) (Rs. per quintal)

Sugar produced in 31.80 19.00 factory during the period commencing on the 1st day of May, 1983, and ending with the 30th day of September, 1983, which is in excess of the average production of the corresponding period of 1979-80, 1980-81 and 1981-82 sugar years.

Provided that the amount of exemption calculated at the rate of specified in column (2) or column (3) of the said Table shall not exceed the amount of duty of excise payable on free sale sugar or levy sugar, as the case may be.

xxx xxx xxx

3. Where during the period commencing on the 1st day of May and ending with the 30th day of September in any of the three sugar years 1979-80, 1980-81 and 1981-82, production of sugar in a factory was nil, the average production of sugar of the corresponding period of 1979-80, 1980-81 and 1981-82 shall, for the purposes of this notification be determined by taking into account only such of the period of which sugar was produced in such factory and the period in which sugar was not produced therein, sha

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2003 Supreme(SC) 234

IMPORTANT POINTThe Tribunal has correctly considered the rebate claim of the appellant.

Cases Referred (4)

IMPORTANT POINT
The Tribunal has correctly considered the rebate claim of the appellant.