Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs Belapur Sugar And Allied Industries ... on 29 October, 1985
Equivalent citations: 1986(6)ECR52(TRI.-DELHI), 1986(23)ELT252(TRI-DEL)
ORDER G. Sankaran, Member (T)
1. This is an appeal filed by the Collector of Central Excise, Aurarngabad (the appellant) against Order No. M. 2476/Aur. 86/84 dated 10-12-1984 passed by the Collector of Central Excise (Appeals).
2. On 21-4-1982, the Central Government issued notification No. 132/82 under Rule 8(1) of the Central Excise Rules, 1944, exempting "sugar produced in a factory during the period commencing on the 1st day of May, 1982, and ending with the 30th day of September, 1982, which is in excess of the average production of the corresponding period of the preceding three sugar years." The exact nature of exemption from the duty of excise and special duty of excise [the latter was leviable in terms of Clause 50(4) of the Finance Bill, 1982, read with the declaration in the Bill under the Provisional Collection of Taxes Act, 1931], was specified separately for "free sale sugar" and levy sugar" and these two terms were defined. Para 4 of the notification, on which the dispute before us turns, read thus-
"Nothing contained in this notification shall apply to a sugar factory where production during the period mentioned in Clause (1) of the said Table during all the preceding three sugar years was nil."
*(The period referred to is from 1-5-1982 to 30-9-1982).
3. On 11-6-1982, the above notification was amended by Notification No. 193/82. Two changes were brought about. First, in the racital of the powers under which the notification was issued, in the place of Clause 50(4) of the Finance Bill, 1882, Section 50(4) of the Finance Act, 1982 was substituted. Second, para 4 (reproduced earlier) was substituted by the following para-
"Where production during May to September, in all the preceding three sugar years was nil, the entire production during May to September, 1982, will be entitled to the exemption under this notification."
4. M/s. Belapur Sugar and Allied Industries Ltd. the respondent, are engaged in the manufacture of sugar. The respondent submitted to the excise authorities a claim, in terms of the Notification No. 132/82, as amended by Notification No. 193/82, for rebate of Rs. 14,33,407.50 on 47,900 quintals of sugar produced in excess during the period 1-5-1982 to 30-9-1982. The Superintendent of Central Excise, Shrirampur, wrote to the respondent on 20-4-1983 allowing the assessee to take provisional credit of Rs. 7,41,467.70 towards rebate of basic excise duty. He did not give any reasons why he disallowed the balance of the claim. On or about 10-10 1983, the respondent filed a submission before the Assistant Collector, Ahmednagar, claiming the balance amount of the rebate claimed. The contention was that the rebate was permissible in terms of the notification on the excess production of sugar and was not dependent on the clearances. As such, the rebate claim in respect of the excess production cleared during the period prior to 11-6-1982 which appeared to have been disallowed by the Superintendent was admissible. On this, the Assistant Collector, Ahmednagar, passed an order on 22-10-1983 disallowing the claim basing his decision on the Pune Central Excise Collecto-rate Trade Notice No. 199/1982 (No. 14/Sugar/1982) dated 25-10-1982. This Trade Notice said that in respect of sugar factories which were not eligible for the benefit of Notification No. 132/82 but became eligible with the issue of amendment Notification No. 193/82 were not eligible for duty rebate on sugar which had already been cleared on payment of duty before the issue of the amending notification on 11-6-1982. Rebate would be admissible on the quantity of sugar shown to have been produced on or after 1-5-1982 but not cleared before 11-6-1982 on payment of duty. The assessee took up the matter in appeal which was disposed of by the Collector (Appeals) by his impugned order of 10-12-1984.
5. We have heard Shri Vineet Ohri, S.D.R. for the appellant and Shri S.P. Kampani, Consultant for the respondent. Shri Ohri, learned S.D.R. submitted that the rate of duty applicable to excisable goods Cleared for home consumption was the one in force on the date of their clearance in accordance with Central Excise Rule 9A. The respondent's factory was not eligible for the benefit of reduced duty in terms of Notification 132/82 during the period 1-5-1982 to 10-6-1982. Notification 193/82 in terms of which the factory became eligible was effective only from 11-6-1982. The rule making authority was not empowered to make a rule with retrospective effect. He cited the Supreme Court judgment in Cannanore Spinning and Weaving Mills Ltd. v. C.C.E. Cochin and Ors.-1978 E.L.T. (J 375) in this context. [We note that this judgment was rendered in the context of a notification under Central Excise Rule 8(1), as in this Case.] Another decision cited was that of the Punjab and Haryana High Court in Neelam Prints v. Dy. Supdt. of Central Excise and Ors.-1982 E.L.T. 895, which followed the Supreme Court's decision in the Cannanore Mills case (supra). The Collector (Appeals), submitted Shri Ohri, fell into error because he merely based his decision on the aspect of the binding effect or otherwise of Trade Notices without considering the aforesaid decisions.
6. Replying, Shri S.P. Kampani, learned Consultant for the respondent, submitted that Notification 193/82 did not make any substantive change in the parent Notification 132/82. It only brought out the intention of the parent notification more clearly. The latter did not at all refer to clearances. On the other hand, it conferred exemption on the entire excess production during the designated period. The Trade Notice seems to have prejudiced the lower authorities. In fact, Shri Kampani submitted, the question of giving retrospective effect to Notification 193/82 did not arise since it Was issued under the provisions of the Finance Act, 1982, and by virtue of Section 38 of the Central Excises and Salt Act, the notification became part of the Act. (When, however, it was pointed out to Shri Kampani that Section 38 had long since been deleted, he did not pursue this argument). He also referred to the Tribunal's decision in C.C.E., Meerut v. Kichha Sugar Co. Ltd.-1985 ECR 1818 on Notification No. 132/82. (We have gone through this decision but have not been able to find its relevance to the present case, nor was it pointed out to us during the hearing).
7. We have carefully considered the submissions of both sides. The question for consideration is whether the excess production of sugar by the respondent factory during the designated period commencing on 1-5-1982, but cleared before the issue of the amending Notification 193/82 on 11-6-1982, was entitled to duty reduction in terms of the said Notification 132/82. There is no dispute about the position that till 11-6-1982 the respondent was not eligible for the benefit of Notification 132/82 dated 21-4-1982, because it was hit by paragraph 4 of the notification. It was only with the issue of amending Notification 193/82 on 11-6-1982 that the respondent became eligible for the benefit of Notification 132/82. On the face of it, there is nothing to suggest that Notification 193/82 had any retrospective effect. It could not have had any retrospective effect in accordance with the ratio of the Supreme Court's decision in the Cannanore Mills case (supra). There is no dispute about the position that the quantity of sugar in respect of which rebate was denied by the Assistant Collector was attributable to the excess production of sugar during the period commencing 1-5-1982. In accordance with Central Excise Rule 9A, the rate of duty depends on the date of clearance of excisable goods for home consumption and is the rate in force on that date. During the periods 1-5-1982 to 10-6-1982, admittedly, the respondent was not eligible for the benefit of Notification 132/82 and the question of applying to the clearances effected during the said period, the reduced rate of duty which became applicable to the respondent only on and from 11-6-1982 just would not arise. Shri Kampani's contention that since the notification confers the duty rebate for the entire production from 1-5-1982 and so would be available for clearances evea during the period prior to 11-6-1982 is to ignore the provisions of Central Excise Rule 9-A. and, is not, therefore, tenable. In the result, we hold that the benefit of the Notification 132/82 as amended on 11-6-1982 by Notification 193/82, was not admissible in respect of clearances of sugar by the respondent during the period 1-5-1982 to 10-6-1982.
8. The appeal succeeds and is allowed, setting aside the impugned order of the Collector (Appeals).