2013 (9) TMI 775 - HC - Central Excise

Claim for Abatement of 11 Days - The claim was made by the respondent in terms of the provisions of Rule 10 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 Held that - The abatement claim was rejected by the original adjudicating authority on the ground that insamuch as the unit was closed for 11 days only in the month of December, the respondents do not fulfill the criteria laid down under Rule 10. However on appeal Commissioner (Appeals), by taking note of the fact that the unit was closed continuously from 21.12.2011 to 20.2.2012 the claim of abatement has to be allowed. On the other hand, it is Revenues contention that inasmuch as in the month of December, 2011 the unit was closed for a period less than 15 days, abatement cannot be allowed. Relying upon Commissioner of Central Excise Lucknow vs. K.P. Pan Products (P) (Ltd) 2012 (11) TMI 723 - CESTAT, NEW DELHI - Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 - Rule 10 does state that a continuous period falling under different calendar month should be split into periods falling under each month and abatement determined separately - The Tribunal further observed that so long as days of closure are continuous, even if days fall in different calender month, it will constitute one continuous period. Tribunal had not committed any error in upholding the order of the Commissioner (Appeals), Customs and Central Excise, NOIDA as the requirement of Rule 10 was for continuous period of 15 days - The Rule does not provide that the period should be confined to any calender month - The period of 15 days may fall within a month or more than one months, provided it was continuous and that the party complies with other conditions set out in Rule 10 of the Rules of 2008 - there was no questions of law as raised arise for consideration in the appeal - The Appellate Authority as well as the CESTAT have not committed any error of law in allowing respondent s claim for abatement - Decided against Revenue.

Summary

Issues:
1. Claim for abatement under Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008.
2. Interpretation of Rule 10 regarding continuous closure period for abatement eligibility.
3. Allowance of abatement for a period spanning multiple calendar months.
4. Applicability of abatement for closure period less than 15 days.

Analysis:
Issue 1: The appeal arose from a claim for abatement filed by the respondent for 11 days in December 2011 under the Pan Masala Packing Machines Rules, 2008. The claim was initially rejected but later allowed by the Commissioner (Appeals) based on a continuous closure period exceeding 15 days, leading to the appeal by the Central Excise department.

Issue 2: The main contention revolved around the interpretation of Rule 10, with the Central Excise department challenging the allowance of abatement for a closure period that spanned multiple calendar months. The Tribunal upheld the decision, emphasizing that a continuous closure period, even across different months, should be considered as one continuous period for abatement eligibility.

Issue 3: The Tribunal referred to a previous judgment where it was established that a continuous closure period falling under different calendar months should be treated as one continuous period for abatement purposes. In this case, the closure period from December 2011 to February 2012, exceeding 15 days, warranted the allowance of abatement for the 11 days in December 2011.

Issue 4: The Central Excise department raised questions regarding the applicability of abatement for a closure period of less than 15 days. However, the Tribunal found no error in allowing the abatement claim for the 11-day closure period in December 2011, as the total continuous closure period met the 15-day requirement, irrespective of the distribution across multiple calendar months.

In conclusion, the High Court dismissed the Central Excise Appeal, affirming the Tribunal's decision to allow the respondent's claim for abatement based on a continuous closure period exceeding 15 days, despite spanning multiple calendar months. The judgment emphasized the importance of considering the continuity of closure periods rather than strict adherence to individual calendar months for abatement eligibility under Rule 10 of the Pan Masala Packing Machines Rules, 2008.