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Union of India - Section

Section 19 in The Sugar Development Fund Rules, 1983

19.

(1)The Central Government, may having regard to the stock of sugar held with the sugar undertakings, the prospects of sugar production, the requirement of sugar for consumption within the country and exports and such other relevant factors as may be considered necessary, decide from time to time, the quantity of sugar to be maintained as buffer stock.
(2)The sugar maintained in the buffer stock shall conform to the grade laid down from time to time by the Indian Standards Institution referred to in clause (e) of section 2 of the Indian Standards Institution (Certification Marks) Act, 1952 (36 of 1952) and shall be of such grade as may be decided by the Central Government.
(3)The Central Government or the Chief Director may, from time to time, require an occupier of the sugar factory to set apart such quantity and grade of sugar, pertaining to such sugar year or years, as may be necessary for purpose of buffer stock;[Provided that the share of each occupier shall be determined on the basis of production of the sugar factory in a particular sugar year and the stock of sugar held with that sugar factory on a particular day and such other criterion.Explanation :- In this sub-rule, the expression "a particular day" means the date of share determination made on or alter the commencement of 2002-2003 sugar year or such year in which buffer stock is created.] [Substituted vide GSR 241(E) dated 25.3.03 for the following proviso 'Provided that the share of each occupier shall be on the basis of the production of the sugar undertaking in a particular sugar year.']
(4)Every occupier of a sugar factory shall set apart sugar so required, and shall store it in separate and distinctly identifiable stocks and lots and in separate godowns within the premises of the sugar factory:Provided that the Central Government may, in exception at cases and for reasons to be recorded in writing, grant exemption to an occupier of a sugar factory from the operation of this rule.
(5)[Omitted] [Omitted vide GSR 817(E) dated 20.12.84 [Every occupier of a sugar factory shall, within fifteen days of the date of issue of the communication under clause(3), furnish a compliance report, in triplicate, in Form-IV to the Central Government]]
(6)Every occupier of a sugar factory shall provide safeguards against damage, loss and deterioration in the quality of sugar stored as buffer stock, and against mixing of other stock with the buffer stock.
(7)Every occupier of a sugar factory shall insure the buffer stock so set apart, against such risks as may be required by the Bank with which the buffer stock is pledged for the purpose of securing loan, as also from floods where the premises of the sugar undertaking are ordinarily exposed to the risk of floods:[Provided that where the occupier of a sugar factory has not pledged the buffer stock with a Bank, he shall insure the buffer stock against destruction or damage by:
(a)Fire;
(b)Explosion of boiler used for domestic purposes only;
(c)Lighting;
(d)Explosion of gas used for domestic purposes or for lighting, heating in a building not forming part of any gas works at any time;
(e)Floods where the premises of the sugar factory are ordinarily exposed to the risk of floods]
(8)In case of any deterioration, damage or loss to the buffer stock, every occupier of a sugar factory shall send to the Central Government a full and detailed report in writing indicating the reasons therefor and the extent of such damage, deterioration or loss.
(9)Every occupier of a sugar factory shall make available to the Central Government or the Chief Director or an Officer deputed by the Central Government, access to the buffer stock of sugar for purposes of inspection as regards its manner of maintenance, its quantity and quality including grade and sugar year relevant to its production and also all books, records and accounts relating to the buffer stock.
(10)No occupier of a sugar factory shall except for the purposes provided under this rule, remove, despatch or replace or dispose of any buffer stock without obtaining prior written permission of the Central Government or the Chief Director.
(11)The Central Government or the Chief Director may, at any time, require an occupier of a sugar factory to release such quantity and quality/grade of sugar out of the buffer stock for sale, consumption, replacement of old or damaged stock of sugar or sugar not conforming to the Indian Sugar Standards as laid down by the Indian Standards Institution as may be specified.
(12)[Omitted] [Omitted vide GSR 817(E) dated 20.12.84. '[Every occupier of a sugar factory shall, within fifteen days of issue by the Central Government or by the Chief Director of the permission or communication referred to in sub rule(10 )or (11), furnish a compliance report, in triplicate, in Form-V to the Central Government and the Chief Director]'.]
(13)Maintenance of funds received by way of additional credit and utilisation thereof;
(a)Every occupier of a sugar factory shall set apart the amount, if any, received from his bankers by way of additional credit on the quantity of buffer stock of sugar and credit the amount so set apart to a separate account with the same banker, for the purposes provided in clause (b)
(b)The amount credited to the separate account shall not be used by the said occupier for any purpose other than for payment of price, including arrears of price, payable for the sugarcane purchased by the sugar factory;
(13A)[ Maintenance of funds received by way of subsidy towards interest, storage and insurance and utilisation thereof;
(a)Every occupier of a sugar factory shall set apart the amount, if any received from the Central Government by way of subsidy towards interest, storage and insurance on the quantity of buffer stock of sugar and credit the amount so set apart to a separate account with his banker with whom he has a separate account under clause (a) of sub-rule (13), for the purpose provided in clause (b) of this sub-rule.
[Provided that where the occupier of a sugar factory has credited such amount for the buffer stock maintained for the period 18th December, 2002 to 17th December, 2004 or a part thereof in an account with the bank or a bank other than the bank referred to in clause (a) of sub-rule (13) and the Central Government is satisfied that such amount has been utilised for the purposes of clause (b) of this sub-rule, it may exempt such sugar factory from the stipulation of crediting such amount with the bank referred to in clause (a) of sub-rule (13)] [Inserted vide GSR 886(E) dated 6.12.01.]
(b)The amount credited to the separate account shall not be used by the said occupier for any purpose other than for payment of price payable for the sugarcane purchased by the sugar factory;
Provided that where the State Government Authority/officer furnishes a certificate in Form VI to the banker referred to in clause (a) above to the effect that the concerned sugar factory has no sugarcane price dues including arrears of price outstanding against it on the date of credit of the amount of subsidy towards interest, storage and insurance into the separate account, the bank may allow the said occupier to use the said amount for any other purpose under intimation to the Central Government.] [Substituted vide GSR 817(E) dated 20.12.84 for Every occupier of a sugar factory shall insure a buffer stock so set apart against fire, theft, including burglary, and also from floods where the premises of the sugar undertaking are ordinarily exposed to the risk of floods.]
(14)Subsidy towards interest, storage and insurance:The Central Government may authorise payment for every quarter year or part thereof [to every sugar undertaking in respect of a sugar factory or such sugar factories which have] [Substituted vide GSR 599 dated 30.07.2012.] (a) set apart the required quantity of sugar [or a part thereof] [Inserted vide GSR 817(E) dated 20.12.84 for as buffer stock.][Provided also that where the occupier of a sugar factory has utilised the advance buffer stock subsidy received from the Central Government for the period from 18th December, 2002 to 17th December, 2004, as provided In clause (b) of sub-rule (13A), such sugar factory may submit the remaining documents required to complete the claim within three months from the date of publication of this notification in the Official Gazette.Provided also that the Central Government may, for the reasons to be recorded in writing, permit all such sugar factories to submit the remaining documents required to complete the claims, within such further period not exceeding three months.] [Inserted vide GSR 365(E) dated 28.5.09.]
(b)pledged [the buffer stock] [Substituted vide GSR 817(E) dated 20.12.84 for the words 'by it'.] with any scheduled bank for the time being included in the second schedule to the Reserve Bank of India Act, 1934 (2 of 1934) or any State Co-operative bank Central Co-operative bank 'as defined in the National Bank for Agricultural and Rural Development Act, 1981 (61 of 1981);
(c)[maintained the buffer stock] [Substituted vide GSR 817(E) dated 20.12.84 for 'maintained it'.] in accordance with these rules, and to the satisfaction of the Central Government, of an amount calculated in the manner provided in sub-rule (15), towards subsidy for the storage, insurance and interest charges:
[Provided that where a sugar factory has not pledged the buffer stock with any scheduled bank, subsidy on account of storage and insurance charges may be authorised for payment by the Central Government as admissible under sub-rule (15) if the buffer stock has otherwise been sequestered, maintained and insured in accordance with the provisions of this rule,] [Inserted vide GSR 817(E) dated 20.12.84.]Provided [further] [Inserted vide GSR 817(E) dated 20.12.84.] that the amount of subsidy payable on account of interest charges shall be the amount calculated under sub-rule (15) or the amount of interest charges actually paid or payable by the sugar undertaking for the quarter or part thereof on the loan or advance received by it on pledging with the bank, the quantity of sugar maintained by it as buffer stock, whichever is less [subject to the condition that where the amount of interest charges actually paid or payable by the sugar undertaking is lower, it shall where necessary, further be restricted to the amount calculated at the maximum rate of bank interest fixed by the Reserve Bank of India hi this behalf but not exceeding the rate of 18 percent per annum] [Inserted vide GSR 817(E) dated 20.12.84;]Provided further that no payment shall be authorised, unless the Central Government in exceptional circumstances decides otherwise) [to the occupier of a sugar factory] [Substituted vide GSR 817(E) dated 20.12.84 for to the occupier of every sugar factory.] which has not-
(a)Paid the cess on sugar under section 3(3) of the Sugar Cess Act, 1982 (3 of 1982);
(b)Furnished the return(s)/information required rule 4 of the Sugar Cess Rules, 1982;
(c)Complied with the provisions of sub-rule (13); and
(d)furnished to the Central Government or the Chief Director the monthly return of the quantity of non-levy sugar sold and the amount of the sale-proceeds.
Explanation: (1) For the purpose of this rule, the months January to March, April to June, July to September: and October to December of a calendar year shall form the quarterly periods.
(2)At the commencement of these rules, the buffer stock shall be deemed to have come into being not earlier than the 1st day of October, 1982.
(14A)[ Subject to the provisions of sub-rule (14), the Central Government may, in exceptional circumstances, authorise an advance payment of seventy five percent of the amount payable as subsidy towards storage, insurance and interest charges for a period as that Government may decide, calculated in the manner provided [in sub-rule (15) to a sugar undertaking in respect of its sugar factory] [Inserted vide GSR 787(E) dated 6.10.03.] that has set apart the required quantity of sugar as buffer stock provided the sugar factory has furnished the following in writing to the Central Government, namely -
(i)the rate of interest at which advance has been obtained by it on pledging the buffer stock of sugar with any scheduled bank or any State Co-operative Bank or Central Co-operative bank referred to in sub-rule (14);
(ii)the average actual realization per quintal of sugar on the sale of non-levy sugar in the open market for a three month period ending on the date from which the buffer stock is required to be held; and an undertaking in Form-VI-A:
Provided that in respect of the buffer stock being maintained for a year with effect from 18th December, 2002, the Central Government may authorise payment to a sugar undertaking in respect of sugar factory that has set apart the required quantity of sugar as buffer stock and furnished an undertaking in Form VI-A an advance payment of seventy five per cent of the amount payable as subsidy towards storage, insurance and interest charges for a year, calculated in the manner provided in sub-rule (15) on the basis of the information furnished in columns 7 and 8 of Form V in respect of the claim preferred by it for the period 18th December, 2002 to 31st March 2003:Provided further that the amount so paid as advance shall be adjusted, against the amounts that may become due on the basis of claims preferred by the sugar undertaking in respect of sugar factory in Form V referred to in sub-rule (16), at the end of the period for which the advance had been paid:Provided also that where complete claims for the entire period for which the buffer stock is required to be maintained, are not preferred within a period of one month after such period, the entire amount of advance paid or an amount as decided by the Central Government shall be refunded by the sugar undertaking in respect of sugar factory:Provided also that if, during the period for which advance has been paid, a sugar factory has not:-
(a)paid the cess on sugar under sub-section (1) of section 3 of the Sugar Cess Act, 1982 (3 of 1982);
(b)furnished the returns and information required under rule 4 of the Sugar Cess Rules, 1982;
(c)complied with the provisions of sub-rule (13); and
(d)furnished to the Central Government or to the Chief Director the monthly return of the quantity of non-levy sugar sold and the amount of sale proceeds then, the amount paid as advance shall be recovered forthwith.]
(15)Manner of calculation of subsidy-(i) the Central Government may specify, from time to time, the rate per annum at which. the subsidy towards interest, storage and insurance charges shall be calculated:Provided that till such rates are specified, they shall be eighteen per cent per annum towards interest charges and one and half per cent per annum towards subsidy on storage and insurance charges of the value of sugar set apart as buffer stock determined with reference to the average of the tariff value fixed by the Central Government in the Ministry of Finance for the purpose of levy and collection of excise duty on sugar for the three months immediately proceeding the commencement of the quarter or the period for which the payment is to be authorised under sub-rule (14):Provided further that the payment of subsidy in respect of a quarter subsequent to the one ending on the 31st March, 1983, or a pan thereof, the value of the buffer stock shall be determined with reference to the average actual realisation per quintal of sugar made by the claimant sugar undertaking on the sale of non-levy sugar in the open market during the relevant quarter/period to which the claim relates.Explanation - 'Non-levy' sugar means the sugar which is outside the purview of the Levy Sugar Supply (Control) Order, 1979 or an order made under clause (f) of sub-section (2) of section 3 of the Essential Commodities Act, 1955 (10 of 1955).
(ii)Subject to first proviso to sub-rule (14), the claim for subsidy for a quarterly period or part thereof shall be based upon the amounts computed in accordance with the following formula, namely:-
(a) subsidy towards interest (Rs.) B x V x l x N365/366
(b) Subsidy towards storage and insurance charges (Rs.) B x V x S x N365/366
(c) Total of (a) and (b) in rupees, rounded off to the nearestrupee.
Explanation to the letters used in the formula:-'B' is the quantity, in quintals of sugar maintained as buffer stock.'V' is the value per quintal of sugar determined under the clause (i)