Judgment:
1. The issue involved in all these three appeals being common they were heard together. The three respondents had claimed rebate of excise duty in terms of notification No. 108/78-CE dated 28.4.1978. The claim was rejected on the ground that the respondents did not fulfil the condition in clause 5 of the notification. But on appeal the claims were allowed by the Appellate Collector. The Central Government subsequently issued notice under section 36(2) of the Central Excises & Salt Act as it was of the view that the Appellate Collector was wrong in his conclusions. The basis therefor was that the factory of the respondents (in each of the cases) had not been on production in all the three years mentioned in the notification as the preceding years but had been started (in each of the cases) after the expiry of one or more of the said three years. The Central Government was of the view that in such circumstances the benefit of notification was not available to the respondents. The respondents replied suitably. It is the proceedings so initiated in the three instances that are now before us, on transfer as these deemed appeals.
2. We have heard Smt. Doily Saxena for the appellant and Shri K.P.Joshi, Advocate for the respondents.
3. Shri Joshi relies upon the decision of the Bombay High Court in Balasahib Desai Sahakari Sakar Karkhana Ltd. v. Union of India (1982 ELT 886 Bombay) in support of his contention that the ground on which the claim for exemption had been rejected was not proper. The Bombay High Court was dealing in the said case with notification No. 257/76-CE dated 30.9.1976. In paragraph 5, the High Court observed as under : "In our judgment, the construction put by the Department that the factory must produce the ' sugar in each and every preceding five years cannot be accepted. The stand taken by the Department and by the authorities which turned down the claim of the petitioners that as the production of the petitioner factory commenced only in the year 1973, that is after the block of preceding five years had already commenced, and therefore, the petitioners are not entitled to the advantage of the notification cannot be accepted. The notification nowhere provides that the advantage is available only if the factory is in existence during the preceding five years and has produced sugar in each year of the preceding five years. We are unable to accept the interpretation suggested by the Department and accepted by the authorities below in our judgment, the petitioners are entitled to the advantage of the notification and the Superintendent of Central Excise was clearly in error in denying the rebate of duty sought by the petitioners." As Shri Joshi points out, the terms of the said notification (which have been extracted in the judgment of the High Court) are similar to the terms of the notification No. 108/78, clause 5 of which was relied upon in the show cause notice dated 5.6.1981. No contrary authority has been cited for the Department. Therefore, respectfully following the decision of the Bombay High Court we hold that though the factory of the respondents may not have been in existence in all the preceding years (the preceding years have been enumerated in the notification) the respondents could not be denied benefit under the notification on that ground, if otherwise they were eligible therefor.
4. Another reason mentioned in the notice of the Government is "further it appears that benefit of notification No. 35/76 dated 25.2.76 being prima facie applicable to the assessees' factory the assessee would be barred from availing of benefit of notification No. 108/78 by virtue of clause 6 of the said notification No. 108/78." 5. As pointed out for the respondents this ground for denial of benefits had not been raised before the Assistant Collector or the Appellate Collector and hence not considered by either of them. No details have been furnished either under the review show cause notice or otherwise as to how the respondents satisfy the said requirements in order to be entitled to benefit under that notification. Shri Joshi denies that the said conditions as stipulated in the said notification are satisfied by the respondents. In the absence of any particulars in that behalf in the review show cause notices we hold that this ground for setting aside the order of the Appellate Collector is not acceptable.
6. In the result we hold that no grounds have been established to set aside the orders of the Appellate Collector in any of these three appeals. The appeals are accordingly dismissed and the review notices of the Government are accordingly discharged.