Instances have come to the notice of the Board where sugar factories availed the duty concession prescribed under Notification No. 130/83 and 131/83 both dated 27.4.83 and as per Directorate of sugar's order dated 4.11.87 the new sugar factories paid duty at the concessional rate of Rs. 38/- per quintal and collected from the buyers the excise duty applicable to normal free sale sugar i.e. Rs. 71/- per quintal. Thus, these sugar factories retained the differential amount of Rs. 33/- per quintal as incentive to them though collected as duty of excise from buyers. Some Collectorates issued show cause notices to these sugar factories asking them to refund the amount collected by them as incentive excise duty. By virtue of Section 11D of the Central Excises & Salt Act, 1944, if any, amount is collected in the form of excise duty, the same has to be credited to the Government Account and also by virtue of Section 11B bid, if any part of the money so credited to the Government Account is refundable, it can be refunded only to the person who has borne the incidence of such amount.

2.     The Indian Sugar Mills Association represented to the Board, urging that the new sugar factories may be allowed to retain the amount of Rs. 33 per quintal. This representation has already been disposed of by informing the Association that it would not be possible to permit retention of the excess excise duty on levy sugar by the sugar factories in view of Central Excise & Customs Amendment Act 40 of 1991 (which came into force from 20th September, 1991) and the Supreme Court's judgement in the case of C.A. No. 3576-77 (NM) of 1992 UOI v. Jain Spinners Limited. A copy of Board's letter F.No. 261/12/40/93-CX.8 dated 14.12.92 to the Association is enclosed.

3.     As already conveyed vide Board's Letter F.No. 15A/16/85-CX.I dated 15.12.93 the excess excise duty on levy sugar realised by Collectorates has to be government by the Central Excise & Customs (Amendment) Act 40 of 1991 and no amount in this regard is required to be passed on to the Ministry of Food.

4.     A copy of the Board's letter F.No. 14/4/92-CX.I dated 17.9.93 to Ministry of Food is also enclosed for information.

5.     All the pending cases should be decided in the light of Board's letter dated 14.12.93 mentioned above.

Indian Sugar Mills Association,

Sugar House,

39, Nehru Place,

New Delhi - 110 019

Crediting of Excess Excise Duty on levy sugar realised by Collectors of Central Excise to levy sugar price Equalisation Fund

Gentleman,

I am directed to refer to your letter Ref. No. SIG/577, dated 21st July, 1992 on the issue of permissibility of excise duty incentives under the incentives Scheme and to state that in terms of Central Excise & Customs Amendment Act 40 of 1991 which came into force from 20th September, 1991 and the Supreme Court's judgement dated 10.9.92 passed in the case of C.A. No. 3576-77 (NM) of 1992 U.O.I. v. Jain Spinners Ltd. it would not be possible to permit retention of the excess excise duty on levy sugar by the sugar factories.