2015 (11) TMI 513 - AT - Central Excise

Abatement claim - abatement claim was allowed but were adjusted against so called demand for uses of their packing machines for manufacturing two types of goods of same MRP - for the same activity, the respondent is liable to pay duty twice - Held that - As there is no notice of demand/show cause notice has been issued to demand the short payment of duty, therefore, question of adjustment of duty by the Adjudicating Authority does not arise. The same view has been taken by the learned Commissioner (Appeals) in the impugned order. Therefore, we do not find any infirmity in the impugned order. The same is upheld. - Decided against Revenue.

Summary

Issues:
1. Adjustment of duty against abatement claim
2. Validity of adjustment without a demand notice
3. Appeal against the Commissioner (Appeals) decision

Analysis:
1. The case involves the respondent, a manufacturer of Pan Masala and Gutkha, who paid duty under Pan Masala Packing Machines Rules. The respondent's factory was closed for 18 days, and they filed an abatement claim for this period. The abatement claim was allowed but adjusted against a demand for using packing machines for manufacturing two types of goods with the same MRP. The respondent contested this adjustment, arguing that no demand notice was issued for the alleged duty shortfall. The Commissioner (Appeals) found in favor of the respondent, stating that without a demand notice, the adjustment was incorrect.
2. The Tribunal considered whether a demand notice was indeed issued to the respondent for the period in question. The learned Authorized Representative confirmed that no notice of demand or show cause notice was issued to demand duty for the alleged short payment during the relevant period. As no such notice was issued, the Tribunal concluded that the Adjudicating Authority had no basis to adjust the duty. The Tribunal upheld the Commissioner (Appeals) decision, finding no error in the order. Consequently, the Tribunal dismissed the Revenue's appeal against the Commissioner (Appeals) decision.
3. In summary, the Tribunal ruled in favor of the respondent, holding that the adjustment of duty without a demand notice was improper. As there was no notice of demand or show cause notice issued for the alleged duty shortfall, the Tribunal upheld the Commissioner (Appeals) decision and dismissed the Revenue's appeal. The judgment emphasizes the importance of following due process and issuing proper notices before making adjustments or demanding payment.