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2013 (9) TMI 539 - AT - Central ExciseCompounded levy scheme - manufacture of pan masala / pan masala containing tobacco commonly known as gutkha - Interpretation of Statute - Whether or not Notification No. 42/2008-C.E. superseded the Notification No. 38/2007-C.E. by implication or both the Not ifications were simultaneously operating during the period - Held that -The assessee-appellant-respondent were liable to pay differential of excise duty based upon different rates in excise duty on account of enhancement of rate of excise duty. The first proviso to Clause 2 of procedure and conditions detailed in Notification No. 38/2007-C.E. provided that in case of revision in the rate of excise duty the same shall be recalculated on the basis of revised rates from the date of revision and the liability of duty leviable on the manufacturer of the specified goods from that date shall not be discharged unless differential duty is paid and in case the amount of duty so recalculated was less than the sum paid then the differential amount shall be refunded to the manufacturer - the excise duty rates had been enhanced vide Notification No. 42/2008-C.E. Two notifications were so inconsistent with or repugnant to each other that both cannot be stand together and such repugnancy arises from different criteria for charging excise duty - If both the Notifications were allowed to operate simultaneously this will obviously create an anomaly for the reason that it would discriminate between two sets of manufacturers of pan masala and gutkha, one who earlier to issue of the Notification No. 42/2008-C.E. were operating under Notification No. 38/2007-C.E. and others who were operating under normal scheme of payment of excise duty under Section 3 of the Excise Act. Assesses were operating under Notification No. 38/2007-C.E. issued under Rule 15 of Central Excise Rules, 2002 - The Notification provided for optional compounded levy scheme in respect of specified excisable goods i.e. pan masala and pan masala containing tobacco (gutkha) which provided prescribed rates of duty per pan masala/gutkha packing machine per month - Despite of issue of above referred Notification No. 29/2008-C.E. (N.T.) and Notification No. 52/2008-C.E., earlier Notification No. 38/2008-C.E. under which the assessees were operating, was not superseded or rescinded. However, on 16-7-2008 Notification No. 44/2008-C.E. was issued rescinding the Notification No. 38/2008-C.E. Penalty U/s 11AC Interest - Penalty imposed on the appellant was not justified because the question of interpretation regarding applicability of Notification No. 38/2007-C.E. or Notification No. 42/2008-C.E. was involved and therefore, no intention to evade payment of excise duty can be inferred. - Penalty waived.
Issues Involved:
1. Whether Notification No. 42/2008-C.E., dated 1-7-2008, superseded Notification No. 38/2007-C.E. by implication. 2. Whether the appellants were justified in paying excise duty under Notification No. 38/2007-C.E. till 15-7-2008. 3. Whether the advance payment of excise duty in June 2008 affects the liability under the revised rates of Notification No. 42/2008-C.E. 4. Justification for imposing penalties on the appellants. Issue-wise Detailed Analysis: 1. Whether Notification No. 42/2008-C.E., dated 1-7-2008, superseded Notification No. 38/2007-C.E. by implication: The Tribunal analyzed the principles of statutory interpretation, emphasizing the presumption against the repeal of earlier statutes by implication unless the intention to repeal is evident from the later statute. Notification No. 38/2007-C.E. provided an optional compounded levy scheme, whereas Notification No. 42/2008-C.E. introduced a compulsory compounded levy scheme for all manufacturers of pan masala and gutkha. The Tribunal concluded that Notification No. 42/2008-C.E., issued under Section 3A of the Central Excise Act, superseded Notification No. 38/2007-C.E. by implication due to the inherent inconsistency and repugnancy between the two notifications. 2. Whether the appellants were justified in paying excise duty under Notification No. 38/2007-C.E. till 15-7-2008: The Tribunal rejected the appellants' argument that they were justified in continuing to pay excise duty under Notification No. 38/2007-C.E. until its formal rescission on 16-7-2008. The Tribunal held that with the issuance of Notification No. 42/2008-C.E., the earlier notification was superseded by implication, making the appellants liable to pay excise duty under the new notification from 1-7-2008 onwards. 3. Whether the advance payment of excise duty in June 2008 affects the liability under the revised rates of Notification No. 42/2008-C.E.: The Tribunal found no merit in the appellants' contention that their advance payment of excise duty in June 2008 absolved them from paying the differential duty under Notification No. 42/2008-C.E. The Tribunal emphasized that the advance payment was provisional, and the actual liability had to be recalculated based on the revised rates. The Tribunal cited the proviso to Clause 2 of Notification No. 38/2007-C.E., which required recalculation of duty in case of any revision in rates. 4. Justification for imposing penalties on the appellants: The Tribunal held that imposing penalties on the appellants was not justified due to the interpretative nature of the dispute regarding the applicability of the notifications. The Tribunal found no intention to evade payment of excise duty on the part of the appellants. Consequently, while upholding the confirmation of the duty demand, the Tribunal set aside the penalties imposed on the appellants. Judgment: - The appeal of M/s. Sarin and Sarin was partly accepted, confirming the duty demand of Rs. 82,64,516/- along with interest but setting aside the penalty. - The appeal filed by M/s. Som Products was set aside. - The appeals filed by the Revenue against M/s. Ashok & Company Pan Bahar Ltd. and M/s. Ashok Fragrances Pvt. Ltd. were allowed, restoring the orders-in-original confirming the differential duty demand. Conclusion: The Tribunal concluded that Notification No. 42/2008-C.E. superseded Notification No. 38/2007-C.E. by implication, making the appellants liable for the differential excise duty from 1-7-2008 to 15-7-2008. The penalties imposed on the appellants were set aside due to the interpretative nature of the dispute. The appeals were disposed of accordingly.
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