2015 (2) TMI 606 - AT - Central Excise

Abatement under Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008 - all the requirement for abatement like giving due intimation, getting the machines sealed, giving the due intimation for re-start of production etc had been duly followed - Revenue s case is that the appellants should have paid the duty for the subsequent month in full and should have claimed the abatement separately. Held that - In none of the impugned orders, it is in dispute that there was a closure of factory for more than 15 days and the required procedure of due intimation of closure, sealing and due intimation of re-opening was followed. In other words, it is not in dispute that the requirements stipulated in Rule 10 of the said Rules were fulfilled. It is also not disputed that the adjustments made were not more than the amounts of duties mandated to be abated as per the said Rule 10. - Rule 10 does not make any stipulation about the abatement having to be claimed by filing an application therefor although it does not imply anything to be contrary either. We find the Rule 9 of the said Rules in one of its provisos stipulates that in case the amount of duty so recalculated is less than the duty paid for the month, the balance shall be refunded to the manufacturer by 20th day of the following month. When seen in the light of this proviso, there is force in the argument of the appellants that when the intention of the Government was that the amount should be refunded, an express provision was made therefore; in the said Rule 10, there is no such provision. - It is quite evident from the foregoing that apart from the Board s circulars dt.30.08.1997 and 15.09.1999, in a series of judicial pronouncements, a consistent approach has been taken to the effect that in case of such adjustment of duty which is mandatorily required to be abated (as has been done in these cases), Revenue cannot insist upon recovery of the amount so adjusted - Decided in favour of assessee.

Summary

Issues:
Appeal against Orders-in-Originals regarding abatement of duty under Pan Masala Packing Machines Rules 2008.

Analysis:
The appellants had been paying duty under Pan Masala Packing Machines Rules 2008 and claimed abatement under Rule 10 for factory closure of 15 days or more. Revenue contended that duty should have been paid in full for subsequent months and abatement claimed separately. The appellants argued that abatement was mandatory for closures over 15 days, citing judgments and circulars. The Tribunal noted that all abatement requirements were met, and adjustments did not exceed mandated abatement amounts.

The Tribunal found Rule 10 did not require a separate abatement claim application. The absence of a provision for refund in Rule 10 supported the appellants' argument. Referring to past judgments, the Tribunal emphasized that denying abatement for failure to pay duty first was incorrect. Circulars from 1997 and 1999 supported granting abatement without prior duty payment, despite an audit requirement.

The Tribunal distinguished a case regarding abatement on individual machines and clarified the timing of a 15-day closure period. Board circulars were deemed non-binding when conflicting with judicial decisions. Previous rulings and circulars consistently favored not recovering abated amounts when duly adjusted. Consequently, the Tribunal allowed the appeals, overturning the impugned orders.

This detailed analysis of the judgment highlights the interpretation of Rule 10, the significance of abatement requirements, the validity of circulars, and the consistent judicial approach towards abatement adjustments under the Pan Masala Packing Machines Rules 2008.