1. There writ petitions are filed by the Sahakari Sakhar Karkhanas Ltd, challenging the order passed by the Collector of Central Excise (Appeals) dated 17th March, 1981 dismissing the appeals filed by the petitioners against the demand made by the Superintendent, Central Excise, directing refund of excess rebate claimed by them, under Notification No. 108/78 dated 28th April, 1978.
2. It is the case of the petitioners that in pursuance of the said Notification they filed a claim for rebate of excise duty on th excess production during the relevant period. Their rebate claims were accepted and sanctioned by the competent authorities and a rebate was granted by way of credit in the personal ledger account. The rebate claim was at Rs. 54/- per quintals. However, on 9th of August 1979 the Superintendent, Central Excise, issued demand notices directing the petitioners to debit in their personal ledger account various sums alleged to have been paid as excess rebate. It is these demand notices which came to be challenged in appeals before the Collector of Central Excise and since the Collector also dismissed the appeals, as already observed, the petitioners have filed the present writ petitions.
3. Shri Phadnis, learned counsel appearing for the petitioners contended before us that the excise duty is leviable as soon as the goods are manufactured. Levy does not depend upon the clearance of goods. Till goods are cleared the manufacturer is obliged to store the goods in his godown at his own risk. Under the notification calculation of rebate once made was final. There was nothing like provisional assessment or calculation or rebate. Rebate was sanctioned to increase the production. Therefore it was an incentive for producing more sugar and with that object Notification No. 108 of 1978 dated 28th April, 1978 came to be issued. By an interpretative process it was not open to the Administrative Officer implementing the notification, to alter or vary the notified rate in co-relation with the rate at which the duty is paid. The rate fixed by the notification was Rs. 54/- per quintal. The rate was granted at that rate and, therefore, it was not open to the central Excise Authorities, to direct any refund only because the actual tax payable or paid, was less than Rs. 54/-. It is also contended by the learned counsel that there is vast difference between the duty payable and duty leviable. These two expressions cannot be interpreted to mean one and the same thing. They cover different areas and filed. Even otherwise the demand made is barred by limitation as it is made beyond the period of six months. In support of his contentions he has placed reliance upon the decision of the Supreme Court in M/s. Muralilal Mahabir Prasad & Others v. Shri B.R. Vad and Others, , decision of the Orissa High Court in 1982 ELT 109 – M/s. Bizi Industries v. Superintendent or Central Excise, Cuttack and others and a decision of the Appellate Tribunal in 1986 (23) ELT 144 (Tribunal) = 1985 (6) ETR 711 – Collector of Central Excise Chandigarh v. Marva Sugar Mills Co. Ltd.
4. On the other hand it is contended by Shri Desai, learned counsel appearing for respondents, that what was initially done was merely a provisional assessment. The procedure of provisional assessment was followed for the mutual convenience of the parties and this is clear from the fact that the petitioners had given undertakings that if afterwards it was found that rebate is paid at a higher rate, they would be liable to refund the same. Therefore, to such a case rule 10 will not apply. He also contended that the final assessment came to be made on 9th August, 1979 and, therefore, it cannot be said that the demand made is barred by limitation. In support of this contention he has placed strong reliance upon the decision of the Supreme Court in – Andhra Re-rolling Works, Hyderabad v. Union of India & others. It is also contended by Shri Desai that the words and expression used in the notification will have to be interpreted and construed in its context and not in isolation. If the notification is so read, the expressions leviable and payable will have the same meaning. In support of this contention he has placed reliance upon the decision of the Delhi High Court in 1982 ELT 247 – Orient Paper Mills Limited v. Deputy Director of Inspection, Customs and Central Excise & others. He then contended that in any case the petitioners had alternate and efficacious remedy under section 36 of the Act and, therefore, these writ petitions are not maintainable. According to the learned counsel in view of the undertakings given by the petitioners, by which they are bound, they are now estopped from arguing otherwise and more so in these writ petitions. In any case this is not a fit case wherein this Court should exercise its extraordinary jurisdiction under Article 226 of the Constitution of India in favour of the petitioners.
5. For properly appreciating the controversy raised before us, it will be worthwhile if a reference is made to the relevant portion of the notification. The notification dated 28th of April 1978 bearing No. 108/78 was issued in exercise of powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944. It states that “the Central Government hereby exempts sugar described in column (1) of the Table below and falling under sub-item (1) of Item No. 1 of the first schedule to the Central Excises and Salt Act, 1944, from so much of the duty of excise leviable thereon as is specified in the corresponding entry in columns (2) and (3) of the said Table”. Para 2 of the notification provides as to how the production of the sugar during the period will be computed. Therefore, in our view this notification will have to be read with rule 8 of the Rules. Rule 8 deals with the power to authorise exemption from duty in special cases. This exemption could be from the payment of whole or any part of the duty leviable on such goods. Therefore, though the notification is styled as a notification giving rebate, in substance it is a notification granting exemption. Exemption could be granted from a duty payable. The expression ‘leviable’ as used in the notification in the context, must have the same meaning. In our view th expression used in this notification cannot be read in isolation or interpreted literally. The words and expression occurring in the notification will have to be interpreted in the context in which they occur, keeping in view the scheme and the object of the notification. If the expressions are so interpreted, then in our view the law laid down by the Delhi High Court in Orient Paper Mills case, must apply to the present case also. This is what the Delhi High Court has held in paras 12 and 13 of the said Judgment :
“12. We already read the provisions of Section 280ZD. The tax credit certificate which is to be given under this provision is for an amount calculated at a rate not exceeding twenty-five percent of the amount of the duty of excise payable on that quantum of the goods cleared during the relevant financial year which exceeds the quantum of the goods cleared by the said party during the base year, whether the clearance is for home consumption or export. As we understand it, the contention of the paper mills is that ‘payable’ should be read as leviable and not as paid. The Excise Act, as noticed earlier, talks of levy and collection of duty. It does not speak of paid or payable duty. Therefore, in the context in which it is used the word ‘payable’ must man what is paid lawfully. what is paid lawfully would be the same thing as what is payable. Indeed, the paper mills pay lesser duty on account of exemption notification. It would not only be inequitable but dishonest to claim a tax credit certificate on the duty that is leviable when what is actually paid or is legally payable is a lesser amount.
13. We may look at it from another angel also. Whenever there is an exemption notification, the duty leviable gets reduced in terms of the exemption notification and to that extent the exemption notification has to be read as forming part and parcel; of the statute of the relevant provision, authorising the levy. In Orient Weaving Mills (P) Ltd. and another v. Union of India and others, AIR 1962 SC 98 a Constitution Bench of the Supreme Court was concerned with the applicability of an exemption notification under the Excise Act to a cooperative society of weavers. It was observed that, “The exemption must, therefore, have reference to the same kind of tax which would otherwise have been leviable but for the exemption. From the notifications set out above, it is manifest that the Government has exempted cotton fabrics produced on powerlooms owned by a cooperative society, and in the present instance owned by the members of the Cooperative Society……. Hence, the Exemption granted is within the terms of the notification aforesaid which have effect as if enacted as a part of the statute….” . Therefore, if the exemption notification in the case of paper mills is read as part of the statute the rate of the levy gets reduced and the distinction between leviable and payable as put forward by the per mills becomes meaningless.”
6. Even otherwise rebate means deduction from the sum to be paid, discount, or partial refund. (See Concise Oxford Dictionary). To give back (part of the amount), to make deduction from a bill. (See Webs- ter’s New Twentieth Century Dictionary) Therefore in substance rebate is a deduction from the sum to be paid or partial refund. Refund or deduction could from the amount paid or payable. Therefore, in our view the Collector of Central Excise was wholly right in coming to the conclusion that there is no different between the tax leviable and payable so far as the present case is concerned. Further the appellate authority was also right incoming to the conclusion that under the Notification No. 108/78 dated 28th of April 1978, no exemption could be claimed exceeding the amount of duty otherwise payable. It is not the scheme of the Act or the notification that exemption could exceed the actual payment of the duty. If the amount is to exceed the amount of duty payable then it is not an exemption but something more and, therefore, we agree with the view taken by the learned Appellate Commissioner that the petitioners will be entitled to rebate or exemption qua the amount of duty actually paid or payable by them on clearance of the goods, and nothing more.
7. It is no doubt true that in the subsequent Notification No. 134/80 dated 29th of August 1980 a proviso is added to the effect that “provided that the amount of exemption specified in Column II or Column III of the said table shall not exceed the amount of duty of excise and special duty of excise payable on free sale sugar or levy sugar, as the case may be” and such a proviso was not there in the notification dated 28th April 1978. But in our view this will not make any difference if the notification dated 28th April 1978 is read in its context and with rule 8 of the Rules. It appears that the proviso was added in the notification dated 29th of August 1980 by way of abundant caution. To say the least what was implicit has been made explicit and nothing more. On a true construction of the notification, no other construction of the said notification is reasonably possible. Therefore the cases on which reliance is placed by Shri Phadnis, laying down the law that fiscal provisions should be strictly construed, are not relevant for deciding the controversy raised before us.
8. So far as the question as to whether the demand made is barred by limitation, is concerned, this contention is based on the footing that the initial assessment made was final. In this context it cannot be forgotten that as to how the exemption should be granted under the said notification, was explained by the trade notice dated 26th of July 1978. Initially rebate by virtue of credit in the personal ledger account, was allowed as per the procedure laid down in this trade notice. The trade notice provided the following procedure :
“Notification No. 108/78 speaks of exemption from duty of excise leviable thereon. Since the Tariff value fixed for free sale sugar has been varied month to month from first April, 1978, in order to sanction the correct amount of claim the Trade is hereby directed to observe the following instructions in this regard :
1) The quantity of excess production eligible for exemption in terms of Notification No. 108/78 should be segregated and stored separately.
2) Separate accounts in the RGI Register should be maintained so as to enable to which at what prevailing rates the excess sugar has been cleared during each of the month.
3) As the clearances of sugar depend on the release orders by Directorate of Sugar & Vanaspati, the rebate claim filed in advance before actual clearance of excess sugar, when sanctioned, will be treated as provisional, subject to its finalisation when the entire excess sugar so segregated is finally cleared and accounted properly.
4) The sugar factories should given an undertaking to refund excess amount if any paid, on finalising the provisional sanction”.
Precisely this was the procedure followed by the petitioners. In terms of this trade notice petitioners had given undertakings to refund the excess amount if any finalisation of the provisional sanction. Therefore, it was clearly understood by the partities that what was initially done was a provisional sanction and not final one. Final sanction came later on. Having taken advantage under the trade notice and in terms having given undertakings in that behalf, in our view now the petitioners are estopped from contending otherwise. Minimum they are bound by their own undertaking. The procedure prescribed by the trade notice was for ascertainment of the duty payable. What was arrived at was the provisional assessment of duty payable. Therefore in our view the authorities were wholly justified in taking a view that what was earlier done was a provisional assessment and not final and, therefore, rule 10 had not application to such a case. Therefore, it cannot be said that the demand made is barred by limitation. We generally agree with the view taken by the Collector, Central Excise (Appeals) and, therefore, we find no substance in these writ petitions. In the view which we have taken it is not necessary to consider the question as to whether the petitioners had an alternate efficacious remedy open under Section 36 of the Act. We are not deciding this contention since according to the petitioners the said remedy had become illusory in view of the decision taken by the Finance Ministry. On the other hand it is contended by Shri Desai that the decision of the Finance Ministry or observations made therein are not binding upon the Tribunal. In our view it is not necessary to deal with this aspect of the matter any further in these writ petitions.
Hence Rule stands discharged in all these Writ Petitions with no order as to costs.