JUDGMENT NASIM SIKANDAR, J.- This further appeal under Section 36-C of the Central Excises Act, 1944 seeks to assail an order of the Customs, Excise and Sales Tax Appellate Tribunal, Lahore dated 20.12.2001. Through that order the learned Members of the Tribunal maintained Order-in-Original No. 28/2000, dated 31.5.2000 passed by the Addl. Collector (Adjudication), Lahore wherein it was found that the present appellant had short paid a sum of Rs. 38,20,019/- on account of central excise duty payable on manufacture of sugar.
2. On examination of central excise records of the appellant, a public company limited by shares and engaged in manufacture of sugar, the officials of the department found that the factory had manufactured 41,297.500 M.Tons sugar during the year 1998-99 and that having failed to export 5% of their production. They were liable to pay central excise duty at the rate of Rs. 1.85 per K.G. On un- exported quantity as required vide notification SRO 455(l)/96, dated 13.6.1996. The case was adjudicated upon by the said authority which found the appellant liable to pay the aforesaid amount of Rs. 38,20,019/- alongwith additional duty in terms of Section 3-B of Central Excises Act, 1944 besides penalty of Rs. 5,000/-.
3. Before the learned Tribunal it was contended that two notifications, SRO 455(l)/96, dated 13.6.1996 and SRO 456(l)/96, dated 13.6.1996, relating to levy of central excise duty on production of sugar provided different rates of duty during the relevant period. Further, while the former notification provided for compulsory export of sugar and a higher rate of duty in case of the failure of the manufacturer to export it, the latter prescribed lower rate of duty with no' such condition. The appellant claimed that they opted to follow the latter SRO 456(l)/96, dated 13.6.1996 and paid duty according to the rate prescribed therein without exporting any quantity of sugar. Accordingly, it was alleged that since they did not opt to be governed by the earlier SRO 455(l)/96 the condition of export or payment of higher rate of duty on the unexported quantity was not applicable in their case.
4. Learned Tribunal, however, disagreed with the following observations:-- "5. We have heard both sides and carefully considered the contentions raised by the appellants.
The emergent legal position in our considered view is that both the notifications, SRO 455(l)/96 and SRO 456(l)/96 though issued on the same date; i.e. 13.6.1996 are two separate exemption notifications issued under Section 12-A of the Central Excises Act, 1944, but not independent of each other. SRO 455(l)/96 grants exemption to various commodities listed in column 1 of the table appended therewith beyond the rate of duty specified in column 4 subject to conditions prescribed in column 3. According to this notification, if a manufacturer of sugar does not export 5% of the total sugar produced in the financial year, the remaining balance of the unexported quantity of that 5% is chargeable to duty @ Rs. 1.85 per Kg.-SRO 456(l)/96 on the other hand grants exemption to various items listed in column 2 of the table appended therewith beyond the rate of duty indicated in column 3 without any condition but according to clause (ii) of the preamble of this notification, goods specified by SRO 455(l)/96 are excluded from its purview, it is thus clear from the foregoing discussion that the general rate of duty on sugar prescribed under SRO 456(l)/96 is not applicable on the unexported quantity of sugar, which was 5% of the total production of 1998- 99 and that the appellants are liable to pay the duty chargeable on the unexported quantity of sugar in terms of SRO 455(l)/96, dated 13.6.1996 "
This has brought the petitioner in appeal before us.
5. After hearing the learned counsel for the parties we will agree with the learned counsel for the appellant that the latter notification SRO 456(l)/96 was beneficial to the tax-payer as manufacturer and since apparently the provisions of two SROs, detailed above, were contradictory which could not be reconciled, the appellant was justified in seeking application and protection of the latter SRO. The view adopted by the Tribunal, as reproduced above, that general rate of duty on sugar prescribed under latter SRO was not applicable on the unexported quantity of sugar which was 5% of the total production in the year 1998- 99 does not appear correct in the case of the appellant as tax-payer. All the moreso when the appellant sought application and protection of the SRO which though issued on the same day was obviously issued latter in time, which is evident from its number, it is also an established principle of interpretation of fiscal statutes that when two equally reasonable interpretations of a provision are possible then the one favourable to the tax- payer needs to be adopted. The attempt on the part of the learned Members of the Tribunal to reconcile the two SROs only to find against the tax-payer was therefore unjustified. We are also informed that in a subsequent judgment dated 30.1.2001 the Tribunal in an identical situation in two appeals filed by M/s. Humza Sugar Mills and Layyah Sugar Mills found for the tax-payer observing that the appellants having elected to follow SRO 456(l)/96, dated 13.9.1996 and without exporting any quantity of sugar paid the central excise duty accordingly nothing was due to the department from either of them.
6. That being so, this appeal is allowed and the impugned order of the Tribunal as well as Order-in- Original which was maintained thereby are set aside.