2015 (6) TMI 549 - AT - Central Excise

Abatement of duty - Held that - There is no dispute about the appellant s entitlement to the abatement and Revenue s only objection is as regards the procedural violation. We find that an identical issue was the subject matter of the Tribunal s decision in the case of Shree Flavours Pvt. Ltd. Vs. CCE, Delhi-IV reported in 2014 (4) TMI 417 - CESTAT NEW DELHI , wherein by taking note of the earlier decision of the Tribunal in the case of Kaipan Pan Masala Pvt. Ltd. 2013 (1) TMI 356 - CESTAT, NEW DELHI , it was held that non-deposit of the duty and subsequent non-claiming of the abatement in violation of the procedure prescribed under the said Rules would not result in denial of substantive benefit to the appellant and the only consequence would be confirmation of interest. - Decided partly in favour of assessee.

Issues:
1. Procedural violation in claiming abatement for duty liability.
2. Entitlement to abatement under Rule 10.
3. Dispute regarding the deposit of duty before claiming abatement.

Procedural Violation in Claiming Abatement for Duty Liability:
The appellants, engaged in manufacturing chewing tobacco, had their packing machines sealed in May, leading to a dispute with the Revenue regarding the procedural aspect of duty payment and abatement claim. The Revenue contended that duty should have been deposited for the entire month before claiming abatement, resulting in proceedings against the appellants for confirmation of duty amounting to Rs. 51,61,290. However, the Commissioner acknowledged the appellants' eligibility for abatement under Rule 10, emphasizing that the goods were not manufactured for a specific period, and duty was paid as per rules. The Tribunal cited a previous case to establish that procedural violations do not negate the substantive benefit of abatement, with the only consequence being the confirmation of interest.

Entitlement to Abatement under Rule 10:
The Commissioner's impugned order recognized the appellants' entitlement to abatement under Rule 10 due to the non-manufacture of goods for 15 days or more, subject to the duty payment as per rules. The Tribunal's decision in a similar case highlighted that failure to deposit duty and subsequently claim abatement in accordance with the prescribed procedure does not result in the denial of the substantive benefit to the appellant. The Tribunal emphasized that the primary issue was the procedural violation, leading to the confirmation of interest rather than the abatement itself.

Dispute Regarding the Deposit of Duty Before Claiming Abatement:
The crux of the dispute between the appellants and the Revenue revolved around the sequence of duty deposit and abatement claim. The Revenue insisted on the duty deposit for the entire month before claiming abatement, while the appellants argued that they followed the prescribed procedure by depositing duty from 17.05.2012 onwards after the machines were desealed. The Tribunal, guided by previous decisions, upheld the appellants' entitlement to abatement but acknowledged the procedural error in the sequence of duty payment and abatement claim. The appellants agreed to deposit the confirmed interest amount, leading to the Tribunal setting aside the impugned order and allowing the appeal, except for the confirmation of interest.

This judgment delves into the nuances of procedural compliance in claiming abatement for duty liability, emphasizing the significance of following prescribed rules despite procedural errors not necessarily negating substantive benefits. The Tribunal's decision provides clarity on the interplay between duty payment, abatement claims, and procedural violations, ensuring a fair balance between compliance and entitlement to benefits under the law.

← Previous Next →