ORDER
K. Prakash Anand, Member (T)
1. At the outset, we have for our consideration, an application filed by the respondents for permission to file additional evidence. This additional evidence comprises the following documents :-
(i) An affidavit from the Managing Director in-charge of the respondent company stating that the application made under Rule 23 of the CEGAT (Procedure) Rules, 1982 is based on the records maintained by the company and are true to his knowledge.
(ii) An order of Registration from the Director of Sugar and Registrar of Cooperative Societies for Co-operative Sugar Mills dated 29th June, 1978, which shows that on the said date, the Ulundurpet Co-operative Sugar Mills Ltd. was registered under Sub-secection (1) of Section 9 of the Tamil Nadu Co-operative Societies Act, 1961 enclosing the certificate of registration and the registered by-laws of the Society. (It authorised the Society to start functioning).
(iii) A certificate in regard to the registration of the Ulundurpet Co-operative Sugar Mills Ltd. dated 29th June, 1978.
(iv) A letter from the Ministry of Industry, Govt. of India dated 273.1982 stating that it has been decided that the name of M/s. Ulundurpet Co-operative Sugar Mills Ltd. be changed to read as M/s. Chengalrayan Co-operative Sugar Mills Ltd.
2. Smt. Vijay Zutshi, SDR, who appears for the department objects to the additional documents which, she says, relate to another unit i.e. M/s. Ulundurpet Co-operative Sugar Mills Ltd.
3. Shri Krishna Kumar, advocate, who appears for the respondents points out that M/s. Ulundurpet Co-operative Sugar Mills Ltds. was the original name of the respondent company. The learned SDR then leaves it to the Bench saying that these aspects have not been gone into by the lower authorities.
4. We have considered this request for filing additional evidence. We find that these documents are contemporaneous and also throw some light on the date when the respondent company came into existence – a point which is vital to the decision in this appeal. We, therefore, allow this application and take the additional documents on record.
5. Coming now to the facts of the case, the respondents filed a refund claim for Rs. 34.66,921.23 by way of incentive rebate under Notification No. 132/82 dated 21.4.1982 as amended. Rs. 15,07,609.53 being 60% of the amount was claimed by way of an advance credit. The Assistant Collector, while rejecting this claim, held that as per para 4 of Notification No. 132/82, where production during May to September in all the preceding three years was nil, the entire production during May to September 1982 will be entitled to the rebate which necessitated that the Mill should be in existence during the three preceding sugar years. In other words, in order that unit may be said to have nil production, it was essential postulate that the mill should be in existence during the three preceding sugar years. The respondent company, the Assistant Collector held, came into existence with effect from 16.10.1980 only and having not been in production for the entire three years period prior to May to September 1982, it was held that it could not be considered as eligible for the duty concession provided in the relevant Notification.
6. When the matter went up in appeal, the Collector (Appeals) held that on a careful reading of the words used in the relevant Notification, he found no warrant for reading in the notification, a condition that the sugar factory which was not in existence during the preceding three sugar years, would not be entitled to partial exemption. Nil production could be due to many and varied reasons. The learned Collector (Appeals) noted that appellants had come into existence on 16.10.1980 and were, therefore, in existence during a major portion of the relevant sugar years. Accordingly, he vacated the order of the Asstt. Collector and directed that the claim of the respondent company for refund of duty be examined afresh even if they were not in existence during the preceding three years. It is against this order that the department is now in appeal before us.
7. In their appeal, the department maintains that according to Paras 3 and 4 of Notifn. No. 132/82, as amended by Notifn. No. 193/82 dated 11.6.1982, the exis-tence of a sugar factory during the three previous sugar years is contemplated to become eligible for exemption. It is stated that in Para 3 ibid, it is provided that where producti-on in any of the preceding three sugar years was nil, the average shall be of the corres-ponding period among the preceding three sugar years in which the factory had actually produced and the periods in which it did not produce during the said three years shall be ignored while arriving at the average. The department has also relied upon the judgment of the Delhi High Court in Civil Writ No. 2999/82 in the case of M/s. Chhata Sugar Co. Ltd.
8. The respondents, on the other side, have filed cross-objections in which the grounds taken are as follows :-
(i) The Collector of Central Excise (Appeals) erred in law in recording that the amending notification No. 193/82 shall only have prospective effect and not retrospective effect.
It is very clear the purpose of the amendment was to give a retrospective effect.
(ii) The Collector of Central Excise (Appeals) erred in recording this view without giving any opportunity to the respondent to argue on the issue.
In a further amendment of these Cross-objections, it is stated, that the learned Collector (Appeals) had mentioned incorrectly in his order that the respondent unit had come into existence on 16.10.1980. There is no evidence to support this view, it is stated and in fact, it is contrary to the records which, it is claimed, had been submitted by the respondents alongwith their application.
9. Later on, the respondents have moved another application for amendment of Cross-objections in which it is claimed that the learned Collector (Appeals) had incorrectly mentioned that the respondent unit had come into existence on 16.10.1980, whereas the respondents came into existence in the year 1978 itself. To support this claim, respondents have filed a copy of Registration Certificate issued by the Director of Sugar and Registrar of Co-operative Societies for Co-operative Sugar Mills, Madras which had been issued to M/s. Ulundurpet Co-operative Sugar Mills Ltd. and they have also filed an order of the Government changing the name of M/s. Ulundurpet Co-operative Sugar Mills Ltd. to M/s. Chengalrayan Co-operative Sugar Mills Ltd.
It is submiited that during the course of hearing before the Collector (Appeals), only the interpretation of the notification was taken up and argued at length and the learned Collector (Appeals) had expressed the view that the facts relating to existence of the unit had no relevance and, therefore, he would allow the appellants the benefit without going into the said facts.
It is urged, without prejudice to the contention that the existence of the unit had no relevance for determining the benefits under Clause 4 of the exemption Notification No. 132/82, as amended, that the learned Collector (Appeals) as well as the Assistant Collector grossly erred in not appreciating that the unit had come into existence as a legal entity on 29th June, 1978. So the production for the years 1979,1980 and 1981 being nil has to be examined in this context and not as if the unit was not in existence, it is urged.
10. It is emphasized that the Appellate Collector had not gone into the contention of the respondent that recovery of rebate, which was initially sanctioned on 13.5.1983 by the Collector, but later rejected by Order dated 25.1.1984 was hit by time bar, as the Show Cause Notice for the rejection was issued only on 30.11.1983, i.e. more than 6 months after the sanction.
11. It is further submitted that in holding that Notification No. 132/82 as amended by Notification No. 193/82, is applicable only prospectively and not retrospectively, the learned Collector failed to take note of Section 5 of Provisional Collection of Taxes Act, 1951 according to which, it is the notification as issued with reference to the relevant Finance Act (as distinguished with relevant Finance Bill) which would prevail and all refunds that became due according to the final position under the Finance Act had to be sanctioned whenever there had been excess recovery by virtue of the provisions of the Finance Bill, read with the provisions of Provisional Collection of Taxes Act, 1931.
12. Smt. Vijay Zutshi, SDR, stated that she relies on the following case law :-
(1) 1986 (23) ELT 252 – Collector of Central Excise, Aurangabad v. Belapur Sugar & Allied Industries Ltd.
(2) 1988 (33) ELT 505 – Gangapur S.S.K. Ltd. v. Collector of Central Excise, Aurangabad.
On the other hand, Shri Krishna Kumar, Advocate cites the following case law in his favour :-
(1) 1987 (29) ELT 614- Collector of Central Excise, Aurangabadv.Marath-wada Sahakari Sakhar Karkhana Ltd.
(2) 1988 (34) ELT 387 – Collector of Central Excise, Chandigarh v. Jagat-jit Sugar Mills.
(3) 1982 ELT 866 (Bom.) – Balasaheb Desai Sahakari Sakhar Karkhana Ltd. v. Union of India and Ors.
(4) 1986 (26) ELT 904 – Yashwant Sahakari Sakhar Karkhana Ltd. v. Union of India and Ors.
13. The two main issues for us to take a view on here are already well settled. The first issue is whether existence of a factory during each of the 3 preceding sugar years is a condition precedent for eligibility for rebate under Notification No. 132/82, as amended. The principle was examined threadbare with a reference to interpretation of Notification No. 108/78 when the view taken by the Delhi High Court in the case of Chatta Sugar Company Ltd. (supra) was also duly considered by the Tribunal. This was in the case of Collector of Central Excise, Aurangabad v. Marathwada Sahakari Sakhar Karkhana Ltd. [1987 (29) ELT 614 (Trib.)]. The Tribunal had taken the view, in the same background, that the Notification did not specifically provide for existence of the factory during each of the 3 preceding sugar years as a condition precedent for eligibility for incentive rebate under the Notification. It was observed that if it were to be held that the factory is to be entitled to the benefit of the relevant notification if it had been in exis-tence during all the 3 preceding years though it did not produce any sugar during a particular year, but would not be entitled to such benefit if it had not produced any sugar during the preceding 3 years for the reason that it was not in existence, this would lead to an absurd result. The Government’s view that under the terms of the Notification no factory would be entitled to the rebate claimed unless it had been in existence during each of the 3 preceding years was held to be not a logical interpretation and, therefore, not acceptable.
14. In the case of Balasaheb Desai Sahakari Sakhar Karkhana Ltd v. Union of India and Ors. decided by the High Court, Bombay [1982 ELT 866] it was observed on the same issue that the construction put by the Department that factory must produce sugar each and every preceding 5 year period could not be accepted. The stand taken by the Department was that since the production of the petitioner factory commenced after the block of preceding 5 years had already started, therefore, the petitioners were not entitled to the benefit of the Notification was rejected. It was held that the Notification nowhere provided that the benefit of the Notification was available only if the factory was actually in existence during the entire preceding 5 year period and had produced sugar in each of the preceding 5 years.
15. There are a number of other decisions of this Tribunal in which it has already been held that the fact that there had been no production in the corresponding period of the base-year would not disentitle the factory to sugar rebate under the relevant notification. In this connection we may refer to the decision of this Bench in the case of Collector of Central Excise, Chandigarh v. Jagatjit Sugar Mills [1988 (34) ELT 387] and Yashwant Sahakari Sakhar Karkhane Ltd. v. Union of India and Ors. decided by the High Court [1986 (26) ELT 904]. We fully agree with the view taken on this issue and hold that even if it were a fact that the respondents unit had not been in existence during a part of the relevant sugar year period, this would not disentitle them from claiming the incentive rebate, if otherwise admissible.
16. In this view of the matter, it is not necessary for us to go into the claim made by the respondents that the observation of the Collector of Central Excise (Appeals) that the unit of the respondents Company had come into existence only on 16.10.1980 was erroneous and that they had actually come into existence much earlier.
17. There remains now for us to deal with the plea taken in the cross-objections that the learned Collector of Central Excise (Appeals) erred in law in recording that the amending Notification No. 193/82 would be applicable only prospectively and not retrospectively, in view of Section 5 of Provisional Collection of Taxes Act, 1931, according to which, it is the notification as issued with reference to the Finance Act, as distinguished from the relevant Finance Bill, which would prevail and that all refunds that become due according to the final position under the Finance Act have to be sanctioned wherever there has been excess recovery by virtue of the provisions of the Finance Bill, read with the provisions of Provisional Collection of Taxes Act, 1931. This point has also been dealt mth in two earlier decisions of this Tribunal. In the case of Gangapur S.S.K. Ltd. v. Col-ector of Central Excise, Aurangabad, [1988 (33) ELT 505] the question decided precise-y was whether the excess production of sugar cleared from the factory of the appellant n that case during the period commencing 1.5.1982, which was cleared before the issue )f amending Notification No. 193/82 dated 11.6.1982, was entitled to duty concession in erms of Notification No. 182/82. In their decision, the Tribunal referred to earlier judg-nent in the case of Collector of Central Excise Aurangabad v. Belapur Sugar & Allied In-lustrits Ltd., Haregaon (supra). It was held that the amending Notification No. 193/82 lid not have a retrospective effect. This view was based on a Supreme Court judgment Cannanore Spinning and Weaving Mills Ltd. v. Collector of Central Excise, Cochin and Ors. -1978 ELT (J 375) which held that the rule making authority was not empowered o make a rule with retrospective effect. Besides, it was held that in terms of Central Ex-ise 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. Dealing with various arguments on the point, it was observed that the normal rule is that laws are prospective and that the normal presumption is in favour of prospective effect. The use of words ‘entire production’ occurring in the substituting clause as inserted on 11.6.1982 was duly considered. However, in view of Central Excise Rule 9A, it was held that there cannot be any contrary interpretation. We concur in this view.
18. We have duly noted that Notification No. 132/82 was issued in exercise of the powers conferred by Sub-rule (1) of Rule 8 of Central Excise Rules, 1944, read with Sub-clause (4) of Clause 50 of the Finance Bill, 1982. This Sub-clause of Clause SO of the Finance Bill relates to levy and collection of special duty of excise and is, therefore, of no avail so far as the case of the respondents is concerned.
19. Finally, the claim of the respondents as regards the applicability of time bar in view of the fact that the recovery of rebate was sanctioned on 13.5.1983, whereas the Show Cause Notice for the rejection was issued on 30.11.1983, i.e. more than 6 months after the sanction. There are various decisions of this Tribunal – Triveni Engineering Works Ltd. v. Collector of Central Excise, New Delhi -1986 (26) ELT 583 and Collector of Central Excise, Allahabad v. Balarampur Chini Mills -1988 (34) ELT 317, in accordance with which it is well settled that sanction of incentive rebate in respect of sugar production is as per the statutory provisions and that, therefore, any claim of recovery due to erroneous refund can be made only within the time limit provided under the statute. This view is reiterated here. However, as held by this Tribunal in the case of Collector of Central Excise, Allahabad v. MIs. Cawnpore Sugar Works Ltd. -1988 (19) ECR 407, in accordance with the decision of the Supreme Court in the case of Geep Flash Light Industries Ltd. – (1988 ELT 1596 SC) -1986 , the date of refund would %e the date when the refund was actually taken and not the date when the order of refund was passed. Where refund is to be taken by taking credit in the PLA, the date of refund would be the date when credit is actually taken in the PLA.
20. In the result, we uphold the order of the Collector (Appeals) which vacates the order of the Assistant Collector in which the claim for incentive rebate of the respon: dent factory was rejected on the ground that since they had come into existence only on 16.10.1980, their previous 3 year’s production cannot be taken as nil and ordered that the respondent’s claim for refund of duty be examined afresh on the basis that appellants are entitled to partial exemption under Notifn. No. 132/82-C.E. as amended by No-tifn. No. 193/82-C.E., even though they were not in existence during the preceding three years. We also hold that the view taken by the Collector (Appeals) that the amending Notification No. 193/82-C.E. shall have only prospective effect and not retros-pective effect is correct and legally maintainable. The department’s appeal is, therefore, rejected.
21. So far as the Cross-Objections are concerned, the plea that the Collector of Central Excise (Appeals) erred in law in holding that the amending Notification No. 193/82 shall only have prospective effect and not retrospective effect is rejected.
22. So far as the Cross-Objection as regards the respondents unit not coming into existence on 16.10.1980, but with effect from an earlier date in the year 1978 is concerned, in the view that we are taking, we do not consider it necessary to go into the question whether the respondent’s unit was in existence prior to 16.10.1980.
23. However, the plea that recovery of rebate, if ordered, should be within the statutory provisions relating to time bar, is upheld and will be kept in view by the Assistant Collector while finally deciding the claim of the respondents as per the orders of the Collector of Central Excise (Appeals).
The Cross-Objections are disposed of accordingly.
Appeal dismissed.