Customs, Excise and Gold Tribunal - Delhi
Gangapur S.S.K. Ltd. vs Collector Of Central Excise on 24 September, 1987
Equivalent citations: 1987(14)ECC326, 1987(13)ECR961(TRI.-DELHI), 1988(33)ELT505(TRI-DEL)
ORDER
G. Sankaran, Senior Vice-President
1. The appellant preferred a claim for refund of Rs. 9,06,946.89 in terms of Central Excise Notification No. 132/82, dated 21-4-1982 on account of sugar produced during the period from 1-5-1982 to 30-9-1982 (quantity : 31,415 quintals) in excess of the average production in the corresponding period of the three preceding sugar years. At a later stage, in response to a show cause notice, the appellant recalculated the refund due as Rs. 8,48,931.44. After holding adjudication proceedings, the Assistant Collector of Central Excise, Aurangabad, passed an order on 18-12-1982 sanctioning only Rs. 3,09,687.98 and rejecting the claim for the balance amount. Briefly put, this order was based on the following considerations :-
(i) the appellants' factory had no production in the preceding three sugar years;
(ii) Notification No. 132/82 did not allow concession to such factories. Only on issue of the amending Notification No. 193/82, dated 11-6-1982, such factories became eligible for the concession.
(iii) The amendment was effective only from 11-6-1982 and applied only to clearances of sugar on and after 11-6-1982 (quantity : 10,780 quintals). In appeal, the Assistant Collector's order was upheld and it is this order of the Collector (Appeals) that is challenged in the present appeal.
2. We have heard Shri B.D. Deshmukh, Advocate for the appellants and Shri Vineet Kumar, Senior Departmental Representative for the respondent.
3. The relevant Clause 4 of the Notification No. 132/82, dated 21-4-1982 read thus :
"Nothing contained in this notification shall apply to a sugar factory where production during the period* mentioned in Column (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] It is not in dispute that the appellant's factory did not produce any sugar during the said corresponding period May to September of all the three preceding sugar years. The aforesaid Clause 4 was substituted by the amending Notification No. 193/82, dated 11-6-1982 to read as follows :-
"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."
It was in pursuance of this that the appellants filed a refund claim with respect of the entire production during May to September, 1982. It is the appellants' contention that this substituted clause, applying as it does to the entire production during May to September, 1982, would be applicable not only to clearances effected on and after 11-6-1982 out of such production but also to clearances effected prior to 11-6-1982.
4. The question which arises for determination is whether the excess production of sugar by the appellant's factory during the period commencing on 1-5-1982 which was cleared before the issue of the amending Notification No. 193/82 on 11-6-1982, was entitled to duty concession in terms of Notification No. 132/82.
5. This very issue had come up before this Tribunal in the case of Collector of Central Excise, Aurangabad v. Belapur Sugar and Allied Industries Ltd. Haregaon, report in 1986 (23) ELT 252. As noted therein, there is no dispute in the present case too about the position that till 11-6-1982 the appellants were not entitled to the benefit of Notification No. 132/82 because they came under the mischief of Clause 4 of the notification and it was only with the issue of Notification 191/82, dated 11-6-1982 that they became eligible for the benefit of Notification No. 132/82. It was held by the Tribunal that the amendment of 11-6-1982 had no retrospective effect. This view was based on -
(a) the Supreme Court's judgment in Cannanore Spinning and Weaving Mills Ltd. v. Collector of Central Excise, Cochin and Ors., reported in 1978 ELT (J 375), which held, with reference to a Central Excise notification under Central Excise Rule 8(1), that the rule making authority was not empowered to make a rule with retrospective effect;
(b) the position that, in terms of Central Excise Rule 9A, the rate of duty applicable was the one in force on the date of clearance of excisable goods and that, therefore, the concessional rate which was made applicable on 11-6-1982 could not be made applicable to prior clearances.
6. But the learned counsel for the appellant contends that such a view would result in invidious distinction between factories depending upon when they effect clearance of the excess production of sugar though the scheme of concession is for giving an incentive to excess production in the same season. In this context, he cited the Supreme Court's judgment in Sukhram Singh and Anr. v. Smt. Harbhiji reported in AIR 1969 SC 1114. In para 13 of the report, the Court observed as follows :-
"13. Now a law is undoubtedly retrospective if the law says so expressly but it is not always necessary to say so expressly to make the law retrospective. There are occasions when a law may be held to be retrospective in operation. Retrospection is not to be presumed for the presumption is the other way but many statutes have been regarded as retrospective without a declaration. Thus it is that remedial statutes are always regarded as prospective but declaratory statutes are considered retrospective. Similarly sometimes statutes have a retrospective effect when the declared intention is clearly and unequivocally manifest from the language employed in the particular law or in the context of connected provisions. It is always a question whether the legislature has sufficiently expressed itself. To find this one must look at the general scope and. purview of the Act and the remedy the legislature intends to apply in the former state of the law and then determine what the legislature intended to do. This line of investigation is, of course, only open if it is necessary. In the words of Lord Selborne in Main V. Stark (1890) 15 AC 384 at p. 388 there might be something in the context of an Act or be collected from its language, which might give to words prima facie prospective a larger operation. More retrospectivity is not to be given than what can be gathered from expressed or clearly implied intention of the legislature."
It is clear from the above observations that the normal rule is that laws are prospective in effect. Retrospectivity if any, must be gathered, if such intention is manifest from the language employed or the context. Shri Deshmukh's contention that Notification No. 193/82, dated 11-6-1982 does not say that it is prospective and that, therefore, retrospectivity could be read into the substituting Clause 4 obviously be accepted for, as the Supreme Court has observed, the normal presumption is in favour of prospectivity. Nor can we gather from the language of the notification a necessary implication that it was meant to be retrospective. The only clue, if it be one, is in the words "the entire production" occurring in the substituting clause as inserted on 11-6-1982. One could perhaps say that in the light of these- words, the benefit of the said Clause 4 must be extended backwards upto 1-5-1982 in which event only the said "entire production" could be brought within the purview of the clause. But, then, as pointed out in the Belapur Sugar and Allied Industries case (supra), we come up immediately against the provisions of Central Excise Rule 9A, which enjoins that the rate of duty shall be that in force on the date of clearance of the excisable goods. Further, the Supreme Court has held in the Cannonore Spinning and Weaving Mills case (supra) that the rule making authority has no power to issue notifications with retrospective effect.
7. Shri Deshmukh has cited the decision of the Government of India as a Revision authority in the case of M/s. Kirloskar Cummins Ltd. reported in 1982 (10) ELT 698. It is seen from the said decision that the Revision authority found that while it was not essential to go into the intention behind issuing an exemption notification, nevertheless, the context cannot be overlooked altogether specially when the issue seems to have been confused due to unhappy drafting. It took note of the fact that the intention of the Government had all along been to grant duty exemption to parts of diesel engines but that due to certain circumstances, there was an interrugnum between two notifications when apparently the benefit was not available.
8. On a careful perusal of the decision of the Government of India, we are of the opinion that it was rendered in the peculiar facts and circumstances of that case and cannot be said to have any application to the present case.
9. Shri Deshmukh then contends that if the Clause 4 as inserted on 11-6-1982 is not considered to be of retrospective effect, there would be conflict between it and Clause 3. Clause 3 reads as follows :-
"3. Where during the period mentioned in Column (1) of the said Table, production in any of the preceding three sugar years was nil, the average shall be determined as under -
The average shall be the average of the corresponding periods among the preceding three sugar years in which the factory had actually produced and the period or periods in which it did not produce during the said three sugar years shall be ignored while arriving at the average."
If this clause is read along with Clause 4 as it existed prior to 11-6-1982, it is clear that Clause 3 was intended to cover cases where there was nil production in any of the preceding three sugar years whereas Clause 4 was intended to cover cases where production during all the preceding three sugar years was nil.
10. Shri Deshmukh further contends that if Notification No. 193/82 is not considered to have retrospective effect, then special Excise duty could not be levied and collected on sugar between 11-5-1982 when Finance Bill, 1982, became an Act and 11-6-1982 when Notification No. 193/82 invoking, inter alia, the provisions of Section 50(4) of the Finance Act, 1982, was issued. This, according, to Shri Deshmukh, would be a pointer to the retrospectivity of Clause 4 as inserted on 11-6-1982. No arguments were, however, adduced to support this point and the issue is not before us and, therefore, we would not like to enter into an academic disputation on the point made about special Excise duty. Nor are we able to detect any indication in the relevant portion of Notification No. 193/82 [amendment (a) to Notification No. 132/82] as to the retrospectivity of Clause 4 as inserted on 11-6-1982.
11. In the light of the foregoing discussion, we uphold the impugned order and dismiss the present appeal.