- (1.) This is an appeal against the judgment and order of a division bench of the High court at Allahabad dismissing a writ petition filed by the appellants.
(2.) The appellants manufacture sugar at a factory at Laksar in Saharanpur district of the State of Uttar Pradesh. They are liable to pay excise duty and additional and special duties of excise. They made a claim for exemption within the provisions of an Exemption Notification dated 28/4/1978, issued under sub-rule (1 of Rule 8 of the central Excise Rules, 1944, whereby free sugar and levy sugar produced in a sugar factory during the period 1/5/1978 to 30/9/1978 was exempt at the rate therein specified if it was in excess of the average production of the corresponding period of the preceding three sugar years. On 6/10/1978 an order was made by the Chief Accounts officer, central Excise, Kanpur, which stated that the appellants' rebate claim had been pre-audited as admissible under the said Notification and, on the excess production of sugar eligible for rebate of 62,022.76 quintals, rebate was admissible in the sum of Rs. 15,59,252.18.
(3.) On 30/7/1979 the Superintendent, central Excise, Hardwar, issued to the appellants a notice. It stated that the appellants "were erroneously sanctioned rebate of Rs. 15,59,252.18. . as against Rs. 12,90,966.42 on excess production of 62,022.76 quintals of sugar achieved during the period from 1/5/1978 to 15/8/1978. . ". The notice set out the details of the rebate granted and the details of clearances and stated that, from these details, "it is obvious that the factory has availed exemption in excess by Rs. 2,68,285.76 which was not admissible to them". The appellants were required to show cause why such excess rebate "granted to them erroneously should not be recovered from them under Rule 10 of the central Excise Rules, 1944".;