2015 (6) TMI 550 - AT - Central Excise

Abatement of duty - whether the appellant must have, first paid, the duty due for the whole month by the due date and then must have claimed abatement or whether the appellant are required to pay only the net amount of duty payable after adjusting the abatement - Held that - Assessee is not required to just pay the duty for the whole month and then claim the abatement and that he is required to pay only the duty for the days for which the machines were operating and only the interest for the period from the due date to the date on which the adjusted duty chargeable was paid would be leviable. We find that the same view has also been taken by Hon ble Allahabad High Court in the case of Steel Industries of Hindustan vs CCE Gahziabad reported in 2013 (10) TMI 172 - ALLAHABAD HIGH COURT , wherein Hon ble High Court held that for claiming the abatement for the closure period, depositing the duty for the whole month was not a pre-condition under Rule 962B of the Central Excise Rules, 1944. - Decisions in the case of Shri Flavours Pvt Ltd vs CCE Delhi-IV reported in 2014 (4) TMI 417 - CESTAT NEW DELHI , Kuber Khaini P. Ltd. vs CCE Rohtak (2015 (6) TMI 549 - CESTAT NEW DELHI), Shri Padma Balaji Steel Pvt. Ltd. vs CCE Coimbatore reported in 2009 (3) TMI 783 - CESTAT, CHENNAI - Accordingly, the impugned orders are set aside except to the extent that the appellants be liable to pay interest for the period of delay in payment of the adjusted duty from the due date - Decided partly in favour of assessee.

Summary

Issues:
1. Interpretation of Pan Masala Packing Machine Rules and Chewing Tobacco Packing Machines Rules regarding duty liability and abatement.
2. Dispute over the requirement to pay duty for the entire month before claiming abatement.
3. Imposition of penalties and interest by the Department.
4. Applicability of previous Tribunal judgments and High Court decision on similar issues.

Analysis:
1. The judgment dealt with the interpretation of Pan Masala Packing Machine (PMPM) Rules and Chewing Tobacco and Unmanufactured Tobacco Packing Machines (CTUTPM) Rules concerning duty liability and abatement for manufacturers of Gutkha, Pan Masala, and Chewing Tobacco.

2. The main issue revolved around whether the appellants were required to pay duty for the entire month before claiming abatement or if they could pay only the net amount of duty after adjusting the abatement. The Department contended that duty must be paid in full first, while the appellants argued for adjusting duty after abatement for the days the machines were operational.

3. The Department had imposed penalties and interest on the appellants under Rule 17 of PMPM Rules and Rule 19 of CTUTPM Rules, along with Section 11AC. Additionally, in one case, penalties were imposed on the Directors of the appellant company. The judgment addressed the validity of these penalties and interest.

4. The Tribunal referred to previous judgments in similar cases, including Shri Flavours Pvt Ltd vs CCE Delhi-IV, Kuber Khaini P. Ltd. vs CCE Rohtak, and Shri Padma Balaji Steel Pvt. Ltd. vs CCE Coimbatore, which ruled in favor of the appellants. The Tribunal also cited a decision of the Allahabad High Court in the case of Steel Industries of Hindustan vs CCE Ghaziabad, supporting the view that paying duty for the whole month was not a pre-condition for claiming abatement. Based on these precedents, the Tribunal set aside the impugned orders, except for the requirement to pay interest for the delay in paying the adjusted duty.

This comprehensive analysis of the judgment highlights the key issues, arguments, and legal precedents considered by the Tribunal in reaching its decision.