A.Banerji, J. - (1.) By this writ petition the petitioner seeks appropriate orders directing the respondents 3 to 5 not to impose or realise Excise duty and additional Excise duty at the rate of 15% and 5% respectively on Levy sugar.
(2.) The petitioner is a Co-operative Sugar Factory registered under the provisions of the U.P. Co-operative Societies Act. It carries on the business of manufacture and sale of sugar at Rasra, district Ballia. Petitioner's factory is a new unit and commenced crushing operation in November 1975.
(3.) The Government of India announced certain incentives for higher production of sugar in order to achieve production target envisaged in the 5th five year plan period. Government Orders had been issued for the establishment of the new sugar factories and for effecting substantial expansion in the existing sugar factories. It was noticed that there had been steep increase in the cost of plant and machinery required for sugar projects and it was found that the new projects were not proving economically viable units. By the aforesaid G.O. the Government gave certain incentives to new sugar factories which commenced production on or after the 1st of April, 1974. The incentive consisted of certain concessions in excise duty and additional excise duty as well as higher percentage of levy free sugar quota. It was also indicated in the above G.O. that in regard to excise duty necessary notification would be issued by the Ministry of Agriculture and Irrigation, Department of Food, Directorate of Sugar and Vanaspati, Krishi Bhavan, New Delhi separately. In pursuance of this the Government issued a Notification No. 35/76-C.E., dated 26th April, 1976, By this notification the sugar produced in excess of 35% of its production would be subjected to Excise duty and additional Excise duty at the rate of 15% and 5% respectively on the price determined by the Government from time to time in respect of sugar which was required to be sold under Section 3(2)(f) of the Essential Commodities Act, known as Levy sugar,;