LEVY SUGAR PRICE EQUALISATION FUND ACT

THE LEVY SUGAR PRICE EQUALISATION FUND ACT,1976

ACT No. 31 OF 1976

16th February, 1976

An Act to provide for the establishment, inthe interest of the general public, of a fund to ensure that the price of levysugar may be uniform throughout India and for matters connected therewith orincidental thereto

BE it enacted by Parliament in theTwenty-seventh Year of the Republicof India as follows: –

1.Short title, extent and commencement: (1)This Act may be called the Levy Sugar Price Equalisation Fund Act, 1976.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall come into force on such dateas the Central Government may, by notification in the Official Gazette,appoint.

2.Definitions: In this Act, unless the contextotherwise requires, –

(a) "controlled price" means theprice of the relevant grade of levy sugar, determined from time to time undersub-section (3C) of section 3 of the Essential Commodities Act, 1955 (10 of1955), or under the Defence and Internal Security of India Rules, 1971, inrelation to any year of production;

(b) "excess realisation", inrelation to each grade of levy sugar, –

(i) means the price realised by anyproducer, on the sale of levy sugar of such grade, in excess of –

(a) the controlled price, or

(b) where any fair price has been fixed bya court for levy sugar of such grade, such fair price, and

(ii) includes any realisation representingthe difference between the controlled price and the price allowed by the courtby an interim order, if such interim order is set aside, whether by the courtwhich made the order or in appeal or revision;

1 [Explanation: For the removal of doubts,it is hereby declared that where in relation to levy sugar of any grade sold byany producer, the producer has realised towards duties of excise with respectto such sugar any amount in excess of the amount payable by way of such duties,such excess shall also be deemed to be excess realisation within the meaning ofthis clause;]

(c) "fair price", in relation tolevy sugar, means the price fixed by the court in excess of the controlledprice, and, where an interim price, fixed by the court, is superseded by aprice which is finally fixed by the court, the price so finally fixed;

(d) "Fund" means the Levy SugarPrice Equalisation Fund, established under section 3;

2 [(e) "levy sugar" means thesugar requisitioned by the Central Government under clause (f) of sub-section(2) of section 3 of the Essential Commodities Act, 1955(10 of 1955);]

(f) "prescribed" means prescribedby rules made under this Act;

(g) "producer" means a personcarrying on the business of manufacturing sugar by the vacuum pan process.

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1. Inserted by the Levy Sugar PriceEqualisation Fund (Amendment) Act, 1984 (54 of 1984), Section 2 (a).

2. Substituted for the original clause (e)by the Levy Sugar Price Equalisation Fund (Amendment) Act, 1984 (54 of 1984),Section 2 (b).

3.Levy Sugar Price Equalisation Fund: (1)There shall be established a Fund, to be called the Levy Sugar PriceEqualisation Fund.

(2) Save as otherwise 1 [provided insub-section (5)], there shall be credited to the Fund, in such manner as may beprescribed, —

(a) the amounts representing all excessrealisations made by the producers, irrespective of whether such excessrealisations were made before or after the commencement of this Act;

(b) the amounts representing any loanswhich may be advanced, or grants which may be made, by the Central Governmentfor carrying out the objects of the Fund.

(3) Save as otherwise 2 [provided insub-section (5)] every producer shall, —

(a) in the case of an excess realisationmade before the commencement of this Act, within thirty days from suchcommencement,

(b) in the case of an excess realisationmade after such commencement, within thirty days from the date on which suchexcess realisation was made,

credit to the Fund, the amount representingsuch excess realisations, together with interest due thereon at the rate oftwelve and a half percent per annum, from the date on which such amount wasrealised by him:

3 [Provident that-

(a) the interest due on so much of anyamount of any excess realisation made before the date of commencement of LevySugar Price Equalisation Fund (Amendment) Act, 1984, as is not credited to theFund together with interest at the aforesaid rate of twelve and a half percentper annum before the expiry of sixty days from the date of such commencement;and

(b) the interest due on so much of theamount of any excess realisation made on or after the date of such commencementas is not credited to the Fund together with interest at the aforesaid rate oftwelve and a half percent per annum within sixty days from the date on whichsuch amount was realised,

shall be at the rate of fifteen percent,per annum from the date on which such amount was realised by the producer.]

(4) 4 [*]

(5) Where, in pursuance of an 5 [interimorder made by any court, whether before or after the commencement of this Act],any amount representing the difference between the controlled price and theinterim price allowed by the court is, –

(a) held by any producer either withhimself or with any other person or with any court, Government, bank or otherauthority, or

(b) collected and kept by the producerunder the cover of any guarantee,

such producer shall, on the final disposalof the proceedings of the court aforesaid, 6 [ credit to the Fund, within sixtydays from the date of such final disposal, such amount, to the extent itrepresents any excess realisation together with interest due thereon at therate of twelve and a half percent per annum from the date on which such amountwas realised by him:

Provided that –

(i) the interest due on so much of suchamount as was realised before the date of commencement of the Levy Sugar PriceEqualisation Fund (Amendment) Act, 1984 and is not credited to the Fundtogether with interest at the aforesaid rate of twelve and a half percent, perannum before the expiry of sixty days from the date of such commencement, and

(ii) the interest due on so much of suchamount as is realised after such commencement and not credited to the Fundtogether with interest at the aforesaid rate of twelve and a half percent perannum within sixty days from the date on which such amount was realised.

shall be at the rate of fifteen percent perannum from the date on which such amount was realised by the producer.]

7 [(5A) Notwithstanding anything containedin sub-section (5), the interest payable on the amount of any excess realisationrequired to be credited to the Fund under that sub-section in respect of anyperiod during which such amount was by reason of any order of any court held bythe producer with any other person or with any court, Government, bank or otherauthority referred to in clause (a) of that sub-section, shall be the interestwhich actually accrued on such amount in respect of such period;]

8 [(5B) Without prejudice to the provisionsof sub-section 95), any amount representing the difference between thecontrolled price and the interim price allowed by the court which-

(a) is held by any producer with any otherperson or with any court, Government, bank or other authority referred to inclause (a) of that sub-section, or

(b) isunder the cover of any guarantee referred to in clause (b) of thatsub-section,

shall, as soon as may be after the finaldisposal of the proceedings of the Court aforesaid, be credited, to the extentsuch amount represents excess realisation together with the interest, if any,which has accrued thereon or been guaranteed in respect thereof, to the Fund bysuch other person, the court, Government, bank or other authority aforesaid or,as the case may be, by the bank or other person furnishing such guarantee andthe amount so credited shall be set off against the amount (including interest)required to be credited by the producer under sub-section (5).

(5C) The provisions of sub-section (5B)shall apply in relation to every amount representing the difference between thecontrolled price and the interim price allowed by the court which, immediatelybefore the commencement of the Levy Sugar Price Equalisation Fund (Amendment)Act, 1984 –

(a) is held by any producer with any otherperson or with any court, Government, bank or other authority mentioned inclause (a) of that sub-section or

(b) is under the cover of any guaranteementioned in clause (b) of that sub-section,

notwithstanding that the final disposal ofthe proceedings of the court aforesaid took place before such commencement andfor this purpose the reference in that sub-section to "final Disposal ofthe proceedings of the court" shall be construed as a reference to suchcommencement.

(5D) Where any amount is credited to theFund under sub-section (5B), such crediting shall, –

(a) in a case falling under clause (a) ofthat sub-section, operate as the discharge of the liability in relation to suchamount of the person, court, Government, bank or other authority so creditingthe amount;

(b) in a case falling under clause (b) ofthat sub-section, have effect as if it had been made in accordance with theguarantee given by the bank or other person crediting the amount and for thispurpose such guarantee shall be deemed to have provided for such crediting.]

(6) For the removal of doubts, it is herebydeclared that the obligation to credit amounts representing excess realisationsto the Fund shall be in addition to any penalty which may be imposed for thecontravention of any provision of this Act.

(7) The Fund shall be administered, subjectto the provisions of section 8, by the Central Government.

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1. Substituted for the words, figures andbrackets "provided in sub-section (4)" by the Levy Sugar PriceEqualisation Fund (Amendment) Act, 1984 (54 of 1984), Section 3 (a).

2. Substituted for the words, figures andbrackets "provided in sub-section (4)" by the Levy Sugar PriceEqualisation Fund (Amendment) Act, 1984 (54 of 1984), Section 3 (b) (i).

3. Proviso inserted by the Levy Sugar PriceEqualisation Fund (Amendment) Act, 1984 (54 of 1984), Section 3 (b) (ii).

4. Sub-section (4) omitted by the LevySugar Price Equalisation Fund (Amendment) Act, 1984 (54 of 1984), Section 3(c).

5. Substituted for the words, figure andbrackets "interim order referred to in sub-section (4)" by the LevySugar Price Equalisation Fund (Amendment) Act, 1984 (54 of 1984), Section 3 (d)(i).

6. Substituted for the words "or inany court of appeal or revision, credit such amount, to the extent itrepresents any excess realisation, to the Fund" by the Levy Sugar PriceEqualisation Fund (Amendment) Act, 1984 (54 of 1984), Section 3 (d) (ii).

7. Sub-section (5A) inserted by the LevySugar Price Equalisation Fund (Amendment) Act, 1984 (54 of 1984), Section 3(e).

8. Sub-section (5B), (5C) and (5D) insertedby the Levy Sugar Price Equalisation Fund (Amendment) Act, 1984 (54 of 1984),Section 3 (f).

4.Determination of questions as to makingof excess realisations: If any question arises as to whether any producer hasrealised, on the sale of levy sugar, any amount in excess of the controlledprice, or, as the case may be, the fair price, it shall be decided by theCentral Government after giving an opportunity to such producer of being heardand after making such inquiry as that Government may deem fit.

5.Discharge of persons of liability inrespect of amounts credited to the Fund: Where any amount is credited to theFund under section 3, 1 [the producer concerned] shall, upon such crediting, bedischarged from the liability to make repayment of such amounts to the personsentitled thereto and such discharge from liability to make repayment shall bewithout any prejudice to any penalty which may be imposed on such producer foreach excess realisation made by him.

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1. Substituted for the words "theproducer by whom such amount is credited" by the Levy Sugar PriceEqualisation Fund (Amendment) Act, 1984 (54 of 1984), Section 4.

6.Right of buyer to claim refund: (1) Whereany amount is credited to the Fund, a refund shall be made from the Fund to thebuyer of levy sugar from whom any excess realisation was made by the produceror dealer:

Provided that no buyer shall be entitled toclaim a refund under this sub-section if he, –

(a) being a wholesale dealer, had passed onthe incidence of such excess over the controlled or fair price of levy sugar tothe retail dealer by whom the price of such sugar was paid, of

(b) being a retail dealer, had passed onthe incidence of such excess over the controlled or fair price of levy sugar tothe consumer by whom the price of such sugar was paid 1 [or].

2 [(c) being a person who is not awholesale dealer or a retail dealer had passed on the incidence of such excessover the controlled or fair price of levy sugar to any other person as part ofthe price of any product in the manufacture of which such sugar has been usedor, as the case may be, to the consumer by whom the price of such sugar waspaid.]

(2) Every application for refund undersub-section (1) shall be made to the Central Government within six months fromthe date on which the excess realisation, in relation to which such refund isclaimed, is credited to the Fund, and every such application shall be in suchform as may be prescribed and shall be accompanied by such documentary or otherevidence as the applicant may furnish to establish that the excess realisation,in relation to which such refund is claimed, was made from him.

(3) The Central Government shall, ifsatisfied, on a scrutiny of the claim made under sub-section (1), that anexcess realisation was made from the claimant, direct that refund be made fromthe Fund to the claimant to the extent of the 3 [excess realisation made fromhim together with interest (if any) thereon credited to the Fund]:

Provided that if the amount standing to thecredit of the Fund is not sufficient to enable the Central Government to makethe refund, such refund shall be made from the Central revenues.

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1. Always deemed to have been inserted" by the Levy Sugar Price Equalisation Fund (Amendment) Act, 1984 (54 of1984), Section 5 (a) (i).

2. Clause (c) always deemed to have beeninserted by the Levy Sugar Price Equalisation Fund (Amendment) Act, 1984 (54 of1984), Section 5 (a) (ii).

3. Always deemed to have been substitutedfor the words "excess realisation made from him" by the Levy SugarPrice Equalisation Fund (Amendment) Act, 1984 (54 of 1984), Section 5 (b).

7.Excess realisation not to be paid to anyproducer of sugar: Notwithstanding anything to the contrary contained in anyother law for the time being in force or in any contract, no amount,representing excess realisations made by a producer or excess realisations madeby a producer under the cover of any guarantee given by any person shall bepaid to any producer.

8.Fund to vest in the Central Government:(1) Any money paid into the Fund, which remains unclaimed after the expiry ofthe period of six months from the date on which it is credited to the Fund,shall vest in the Central Government and such amount shall be utilised by thatGovernment in such manner as may be prescribed having regard to the interestsof the consumers of levy sugar as a class and the need to ensure that theretail price of levy sugar throughout India is uniform:

Provided that, notwithstanding the vestingof such money in the Central Government, a claim for the refund of moneystanding to the credit of the Fund may be made [in the manner specified insub-section (2) of section 6] at any time by a buyer who is lawfully entitledto make such claim, and every such claim, if admitted, shall be dealt with asif the money relatable to such claim had not vested in the Central Government.

(2) The Central Government shall not grantany loan or give any financial assistance from the Fund except for the purposesof this Act.

(3) The Central Government shall maintain,or if it thinks fit specify the authority which shall maintain, proper andseparate account and other relevant records in relation to the Fund in suchform as may be prescribed in consultation with the Comptroller and AuditorGeneral of India.

9.Power to require producers to maintainaccounts, etc: The Central Government may, if it is satisfied that it isexpedient or necessary so to do for carrying out the provisions of this Act, byan order, direct any producer to maintain such books of account and otherrecords in relation to levy sugar as it may think fit and to produce such booksof account and other records for inspection and may also direct such producerto furnish such information relating to levy sugar as may be specified in theorder.

10.Power of entry, search and seizure: (1)Any authority specified by the Central Government in this behalf may, if it issatisfied that any provision of this Act has been, or is being, or is about tobe, contravened, authorise any person to enter and search any premises whereany accounts, books, registers and other documents relating to levy sugar andbelonging to, or under the control of, a producer or his agent, are maintainedor kept for safe custody.

(2) The person so authorised may seize anysuch accounts, books, registers or other documents if he has any reason tobelieve that a contravention of this Act has been, or is being, or is about tobe, committed:

Provided that the accounts, books, registersor other documents seized under this section shall not be retained in custodyof the Central Government for a period exceeding ninety days:

Provided further that where such accounts,books, registers and other documents are required for the purposes of anyprosecution, they may be retained in the custody of the Central Government fora further period, not exceeding ninety days, for the purposes of suchprosecution.

(3) The provisions of the Code of CriminalProcedure, 1973 (2 of 1974), relating to searches and seizures, shall, so faras may be, apply to searches and seizures made under this Act.

11.Power of Central Government to recoverexcess realisations as arrears of land revenue: If any producer makes anydefault in crediting to the Fund 1 [any excess realisation made by him, or anyinterest due on such excess realisation or any part of such excess realisationor interest, such excess realisation or such interest or such part], as thecase may be, shall be recoverable by the Central Government from such produceras an arrear of land revenue.

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1. Always deemed to have been substitutedfor the words "any excess realisations made by him or any part thereof,such excess realisations or such part" " by the Levy Sugar Price EqualisationFund (Amendment) Act, 1984 (54 of 1984), Section 6.

12.Dissolution of the Fund: The CentralGovernment may, by notification in the Official Gazette, declare that, witheffect from such date as may be specified in the notification, the Fund shall ceaseto exist and thereupon all the amounts lying to the credit of the Fund shall becredited to the Central revenues and refund, if any, made, by the CentralGovernment, after such cesser, to any buyer of levy sugar shall be treated asan order for the refund of revenue.

13.Penalties: (1) If any producer –

(a) makes any default in crediting to theFund 1 [any excess realisation made by him or any interest due on such excessrealisation or any part or such excess realisation or interest], or

(b) having been required by the CentralGovernment so to do, omits or fails to –

(i) maintain any books, accounts or otherrecords in relation to levy sugar, or

(ii) maintain any books, accounts or otherrecords for inspection, or

(iii) furnish any information or furnishesany information which is incorrect or false in material particulars,

he shall be punishable with imprisonmentfor a term which may extend to two years, or with fine which may extend to fivethousand rupees, or with both.

(2) No court shall take cognizance of anyoffence punishable under this Act except on the complaint in writing made bythe Central Government or by any officer or authority authorized, in writing,by that Government in this behalf.

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1. Substituted for the words "anyexcess realisations made by him or any part thereof" by the Levy SugarPrice Equalisation Fund (Amendment) Act, 1984 (54 of 1984), Section 7.

14.Removal of difficulties: If anydifficulty arises in giving effect to any provision of this Act, the CentralGovernment may make such order, not inconsistent with the provisions of thisAct, as may appear to it to be necessary to remove the difficulty.

15.Protection of action taken in goodfaith: No suit, prosecution or other legal proceeding shall lie against theCentral Government or any person authorised by the Central Government foranything which is in good faith done or intended to be done under this Act orany rule or order made thereunder.

16.Power to make rules: (1) The CentralGovernment may make rules for carrying out the provisions of this Act.

(2) In particular, and without prejudice tothe generality of the foregoing power, such rules may provide for all or any ofthe following matters, namely: –

(a) the manner in which amounts shall be creditedto the Fund under section 3;

(b) the form in which an application forrefund, referred to in section 6, shall be made;

(c) the manner in which amounts standing tothe credit of the Fund shall be utilised, as required by section 8;

(d) the form in which the account and therelevant records, referred to in sub-section (3) of section 8, shall bemaintained;

(e) any other matter in relation to whichsuch rules are required to be, or may be, made.

(3) Every rule made by the CentralGovernment under this Act shall be laid, as soon as may be after it is made,before each House of Parliament while it is in session for a total period ofthirty days which may be comprised in one session or in two or more successivesessions, and if, before the expiry of the session immediately following thesession or the successive sessions aforesaid, both Houses agree in making anymodification in the rule or both Houses agree that the rule should not be made,the rule shall thereafter have effect only in such modified form or be of noeffect, as the case may be; so, however, that any such modification orannulment shall be without prejudice to the validity of anything previouslydone under that rule.