UNION OF INDIA Vs. DECCAN SUGAR AND ABKARI COMPANY LIMITED MADRAS

JUDGEMENT

(1.) This judgment will dispose of writ appeal Nos. 313 and 310 of 1980 which arise out of the orders in W.P. Nos. 551 of 1977 (Aruna Sugars Ltd. by M. Srinivasan Executive Director, Pennadam- W.P. 551/77-The Deccan Sugar and Abkari Co. Ltd. represented by its Mg. Director, S.N. Lalv. The Union of India represented by the Collector of Central Excise and another, Madrasand W.P. 1625 of 1978 respectively. The petitioners in both the writ petitions are sugar manufacturers. We are concerned with Item 1 of a notification issued on 12-10-1974 by the Central Government in exercise of its powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944. The relevant portion of that notification reads as follows :

(2.) In W.P. 551 of 1977, the Deccan Sugar Co., is the petitioner. Though there was no production of sugar during October and November 1974, the petitioner was granted excise duty rebate for Rs. 4, 23, 800 under Item 1(a) of the notification reproduced above and credit was given to the petitioner in the PLA account. However, when a supplemental claim for additional rebate was. made, the Inspector of Central Excise, Vridhachalam, by his letter dated 19-8-1975, asked the petitioner to refund the sum of Rs. 4, 23, 800, for which credit had already been given, on the ground that there was no production of sugar during the corresponding months of the previous five years. Similarly, in the case of the petitioner in W.P. 1625 of 1978, who had also no production of sugar in the corresponding months of October and November during the years 1970-71 and 1971-72, excise duty rebate of Rs. 12, 56, 672.92 was granted to the petitioner under clause 1(a) of the notification reproduced above. Subsequently, the Assistant Collector of Central Excise, Trichi issued a notice dated 15th July, 1975 to the petitioner stating that the petitioner was entitled to a lesser sum by way of rebate on the notification and that a sum of Rs. 1, 46, 192.32 had been paid in excess erroneously and asked the petitioner to repay the said sum. This order was confirmed on appeal by the Collector of Central Excise, Madras, by his order dated 1-4-1979.

(3.) When these demands were challenged by the petitioners in the writ petitions, the stand taken by the department was that since there was no production at all in the corresponding period from 1st October to 30th November of the preceding five sugar years, the petitioner in W.P. No. 551 of 1977 was not entitled to any rebate at all. So far as the petitioner in W.P. 1625 of 1978 was concerned, the average production according to the department ought to be found out only by dividing the total production of the corresponding period in the sugar years 1969-70 and 1971-72 by 2.