2015 (5) TMI 335 - AT - Central Excise

Waiver of pre deposit - Valuation of goods - Duty liability in respect of pan masala retail pouches - pouch packing machine - Held that - First proviso to Rule 8 becomes applicable when on an existing packing machine, the manufacturer commences manufacture of the goods of the a new RSP during that month and in such a situation, this has to be treated as an addition in the number of operating packing machines for the month or in other words, that machine would have to be treated as two machines. - new retail sale price would mean the retail sale price which had not been declared in respect of that machine in the Form-I declaration. For example, when in terms of the Form-I declaration, a manufacturer is to manufacture the Gutkha/panmasala pouches of ₹ 3 per pouch during a particular month, and sometime during this month, he starts manufacture of Panmasala pouches of ₹ 4 per pouch which had not been declared in the Form-I declaration, it would be treated as a new RSP. However, if in the Form-I declaration, he had declared that machine to be used for manufacture of both the RSPs of ₹ 3 as well as ₹ 4, in our Prima-facie view, it cannot be treated as the case of commencing manufacture of goods of new RSP so as to attract the first proviso to Rule 8. In fact, if the intension of the Government had been to treat a particular machine being used during particular month for manufacture of the retail pouches of two or more RSPs as that many machines, the first proviso would have been worded differently. It is well settled law when the statute is clear and unambiguous; it has to be given effect to without adding any words to it or subtracting any words from it. Prima-facie view that the Department s stand in this case is not correct and as such, the appellant have strong prima-facie case in their favour. The requirement of pre-deposit of the duty demand, interest and penalty is, therefore, waived for hearing of the appeal and recovery thereof stayed. - Stay granted.

Summary

Issues:
Dispute regarding duty liability under Panmasala Packing Machine Rules, 2008 for manufacturing Gutkha and panmasala pouches of different RSPs. Applicability of Rule 8 and first proviso to Rule 8 of the PMPM Rules in determining duty liability.

Analysis:
1. The appellant, a manufacturer of Gutkha and panmasala, faced a duty liability dispute for using a packing machine for manufacturing panmasala pouches of different RSPs. The Department contended that the machine should be treated as two machines due to manufacturing pouches of RSPs Rs. 2 and Rs. 3, imposing additional duty liability.

2. The appellant argued that the first proviso to Rule 8 applies only when a new RSP is manufactured on an existing machine during a month. They maintained that since both RSPs were declared in Form I for each month, the first proviso should not be applicable. The appellant also challenged the applicability of a Board's Circular supporting the Department's stance.

3. The Tribunal examined the declarations made by the appellant for the disputed months, confirming the use of one machine for manufacturing panmasala pouches of Rs. 2 and Rs. 3 RSPs. The Department's claim of additional duty liability was based on treating the machine as two due to manufacturing pouches of different RSPs.

4. Analysis of Rule 8 of the PMPM Rules revealed that the first proviso applies when a new RSP is manufactured on an existing machine during a month. The Tribunal interpreted "new retail sale price" as a price not declared in Form I. If both RSPs were declared, it did not constitute a new RSP, negating the Department's stance.

5. The Tribunal held a prima facie view favoring the appellant, stating that the Department's interpretation was incorrect. It emphasized that clear statutory language must be followed without adding or subtracting words. Consequently, the requirement for pre-deposit of duty demand, interest, and penalty was waived, and recovery stayed for the appeal hearing.

6. The Tribunal's decision favored the appellant, allowing the stay application and indicating a strong prima facie case in their favor. The ruling highlighted the importance of interpreting statutory provisions accurately and adhering to the explicit language of the law.

This detailed analysis of the judgment addresses the issues involved, the arguments presented by both sides, the interpretation of relevant legal provisions, and the final decision reached by the Tribunal, providing a comprehensive understanding of the case.