2014 (7) TMI 697 - AT - Central Excise

Waiver of pre-deposit - payment of duty in advance - Pan Masala Packing machines Capacity Determination and Collection of Duty Rules 2008 - Held that - if a machine is added or installed during a month after 5th of that month then as per third proviso to Rule 9 of PMPM Rules the differential duty with respect to that machine can be paid by the 5th of the following months. Therefore, prima-facie appellant has a case that duty with respect to sealed and de-installed machines cannot be made to be paid in advance for the entire month if machines were not operational upto 5th of a month. Prime-facie and statutorily no duty liability can be fastened on a manufacturer with respect to goods which have not been manufactured upto the 5th day or till the machine remained sealed in a month when machines manufacturing the goods are not operating - Following decision of M/s. Pm Products Versus CCE, Ahmedabad 2013 (10) TMI 1199 - CESTAT AHMEDABAD - Stay granted.

Summary

Issues: Stay applications regarding duty liability under the Pan Masala Packing Machines Capacity Determination and Collection of Duty Rules 2008.

Analysis:
The appellant filed stay applications challenging demands confirmed by the Adjudicating Authority related to duty liability under Rule 7, 8, 9, and 10 of the Pan Masala Packing Machines Capacity Determination and Collection of Duty Rules 2008 (PMPM Rules). The appellant argued that they complied with all required intimations and procedures at the time of sealing/de-installation of packing machines and contended that duty cannot be proposed for goods not manufactured or cleared during the sealing period. The appellant cited previous orders where stay was granted in similar cases under the PMPM Rules.

The Revenue, represented by Shri J Nagori, opposed the stay applications citing case laws such as Shiv Shakti Agrifood Pvt Ltd vs CCE Delhi I and Dharampal Satyapal Ltd vs. Noida, arguing against granting stay to the appellant.

After hearing both sides and examining the case records, the Tribunal analyzed the provisions of Rule 7, 8, and 9 of the PMPM Rules. It was noted that duty for operating machines for a month must be paid in advance by the 5th day of that month. However, if a machine is sealed after the 5th of the month, the duty for the entire month must still be paid. Conversely, if a machine is added or installed after the 5th of a month, the differential duty can be paid by the 5th of the following month as per Rule 9. The Tribunal found that duty liability cannot be imposed on goods not manufactured until the 5th day of a month or while the machine is sealed and not operational. Citing precedents like M/s PM Products vs CCE, Ahmedabad, the Tribunal granted stay on the recovery of amounts involved in the appeals until their disposal.

In conclusion, the Tribunal allowed the applications for waiver of pre-deposit of amounts involved in the appeals and stayed the recovery pending the final disposal of the appeals.