2013 (12) TMI 1280 - AT - Central Excise

Duty liability as per Rule 8 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 Waiver of Pre-deposit Held that - Rule 8 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 is applicable when there is addition of packing machines in the factory during a particular month - the appellant has installed two new packing machines in the month of July 2009 - when there is addition or installation of a new machine on any particular day of the month, it has to be treated that the total number of machines working on any particular day were working for the entire month - As such the duty for the entire month is prima facie payable by the appellant there was no prima facie case in favour of Assessee thus, the assessee is directed to deposit the entire amount of pre-deposit stay not granted.

Summary

Issues: Duty liability under Pan Masala Packing Machines Rules, 2008 for addition of packing machines in the factory during a particular month.

Analysis:
1. The appellant, engaged in manufacturing pan masala and gutkha, was discharging duty liability under the Pan Masala Packing Machines Rules, 2008. They had two types of packing machines with different MRPs installed in their factory.

2. The appellant discontinued the use of machines manufacturing gutkha with an MRP of Rs. 2 in June 2006 but later re-started the discontinued machine and added two new machines of MRP Rs. 2 in July 2006, paying duty on a proportionate basis from 10th July 2006.

3. The Revenue contended that since the maximum number of machines working in the factory in July 2006 was 5, the duty liability for the entire month had to be discharged as per Rule 8 of the Pan Masala Packing Machines Rules, 2008.

4. Rule 8 states that in case of addition or installation of a packing machine in the factory during the month, the number of operating packing machines for the month shall be taken as the maximum number of packing machines installed on any day during the month.

5. The Tribunal observed that the appellant had indeed installed two new packing machines in July 2006. Therefore, as per Rule 8, the total number of machines working on any particular day was considered to be working for the entire month, making the duty for the entire month payable by the appellant.

6. The Tribunal found no prima facie case in favor of the appellant as they had not pleaded any financial hardship. Consequently, the appellant was directed to deposit the entire duty amount of Rs. 34,83,870 within 12 weeks from the date of the order.

7. The matter was scheduled to come up for compliance verification on 7th June 2013, and subject to the deposit of the duty amount, the appeal itself would be heard for final disposal on the same date.