B.P. Jeevan Reddy, C.J. - (1.) THE petitioner is a sugar factory. It worked during the sugar year 1972 -73. The said sugar year commenced on 1st October, 1972 and ended on 30th September, 1973. The petitioner produced certain quantity of sugar during the period 1st May, 1973 to 30th June, 1973. It claimed benefit of the notification dated 28th September, 1972 issued by the Central Government under Rule 8(1) of the Central Excise Rules. The notification, evidently with a view to encourage increased production of sugar, provided certain concession in the matter of duty where the sugar is produced during the said sugar year, in excess of previous sugar year. It would be appropriate to set out the said notification in so far as it is relevant: " Government of India Ministry of Finance (Department of Revenue & Insurance) New Delhi dated the 28th September, 1972 6th Asvina, 1894 S.K. Notification Central Excise GSR. In exercise of the powers conferred by sub -rule (1) of , 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 column (3) of the said Table. TABLE Sl. Description of sugar Duty of excise No. 1. 2. 3. 1. Sugar produced in a factory during the period commencing Rupees forty per from the 1st day of October, 1972 and ending with the quintal. 30th day of November 1972 which is in excess of the quantity of sugar produced during the corresponding period in 1971. 2. Sugar produced in a factory during the period commencing Rupees twenty per from the 1st day of December, 1972 and ending with quintal. the 30th day of April 1972 which is in excess of 115% of the quantity of sugar produced during the period commencing from the 1st day of December, 1972 and ending with the 30th day of April, 1972. 3. Sugar produced in a factory during the period commencing Rupees thirty per from the 1st day of May, 1973 and ending with quintal. the 30th day of June, 1973 which is in excess of the quantity of sugar produced during the corresponding period in 1972. 4. Sugar produced in a factory during the period commencing Rupees twenty per from the 1st day of July, 1973 and ending with the quintal. 30th day of September, 1973 which is in excess of the quantity of sugar produced during the corresponding period in 1972. Provided that the exemption under the notification shall not be admissible to a factory : - (a) which did not work during the base period, or (b) which had only a trial run in the base period, or (d) which commences production for the first time on or after the 1st day of October, 1972.
(2.) THE petitioner submitted a claim for rebate in a sum of Rs. 98,460/ - for the said two months' period falling within para 3 of the said notification. It was allowed by the Assistant Chief Accounts Officer of the Central Excise Department, Kanpur. Subsequently, however, the Inspector, Central Excise, Roorkee gave a notice dated 17 -2 -1977 calling upon the petitioner to explain why the aforesaid amount be not recovered from him under Rule 10A of the Central Excise Rules, 1944. The only reason given in the said show cause notice is that during the period May and June, 1972, the production of sugar in the petitioner's factory was nil and if so, he is not entitled to the benefit of reduced duty in terms of the said notification particularly, having regard to Clause A of the first proviso. It is this show cause notice which is questioned in this writ petition. We find that the contention raised by the petitioner is squarely covered in his favour by a bench decision of this Court in L.H. Sugar Factories v. Union of India The said decision deals with an identical situation. Having regard to the language employed in Clause (1) of the first proviso, it was held that it is enough that there is production in the base period and further that even if the production of sugar during the period 1 -5 -1972 to 30 -6 -1972 is nil, the petitioner would still be entitled to the benefit of the said notification. The said decision is binding upon us and indeed it appears that it has been followed by another bench of this Court in Kesar Enterprises Ltd. v. Union of India
(3.) FOLLOWING the said bench decision, this writ petition is allowed and the impugned show cause notice is quashed. There shall be no order as to costs.;