2015 (11) TMI 956 - HC - Central Excise

Infraction of Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rule 2008 - Intimation for closure of factory not given - Held that - From the perusal of the record that intimation of closure of the factory was given by the assessee on 10.1.2013 intimating the Department that the production would be closed w.e.f. 15.1.2013. According to the appellant 11.1.2013 and 12.1.2013 were holidays and, therefore, only two working days were provided, namely, 13.1.2013 and 14.1.2013, consequently, there was a clear cut violation of Rule 10. - pursuant to the intimation the Department reached the premises and sealed the factory on 14.1.2013. Consequently, substantial compliance of Rule 10 had been made. The idea for giving prior intimation of three days is to give the department sufficient time to reach the premises and seal the unit so that clandestine manufacturing and removal of goods does not happen. In the instant case we find that the department after due intimation had reached the premises and had sealed the unit on 14.1.2013 - No substantial question of law arises - Decided against Revenue.

Summary

Issues: Infraction of Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rule 2008

Analysis:
The appeal in this case was filed concerning the violation of Rule 10 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rule 2008. The rule specifies that in case a factory does not produce the notified goods for a continuous period of fifteen days or more, the duty calculated on a proportionate basis shall be abated if the manufacturer files an intimation with the concerned authorities at least three working days prior to the commencement of the said period. The appellant contended that the intimation was not provided three working days in advance as required by the rule.

Upon reviewing the record, it was found that the assessee had given intimation of factory closure on 10.1.2013, stating that production would be closed from 15.1.2013. The appellant argued that since 11.1.2013 and 12.1.2013 were holidays, only two working days were available, leading to a violation of Rule 10. However, the court rejected this argument, stating that the notice was given on 10.1.2013, which was a working day and should be included in counting the three working days.

Furthermore, it was observed that following the intimation, the Department sealed the factory on 14.1.2013. The court noted that substantial compliance with Rule 10 had been achieved, as the purpose of the three-day intimation period is to allow the department to seal the unit to prevent clandestine manufacturing and removal of goods. In this case, the department had sealed the unit after due intimation on 14.1.2013, indicating compliance with the rule.

Based on the above analysis, the court concluded that there was no substantial question of law requiring consideration. Consequently, the appeal was dismissed, affirming the compliance with Rule 10 in the given circumstances.