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2017 (11) TMI 1727 - AT - Central ExciseSuo-moto abatement - manufacture of Pan Masala - Compounded Levy Scheme - whether the assessee have rightly taken suo-motu abatement under the fact that they operated there factory, manufacturing Pan-Masala notified goods under the Pan Masala Packing Rules, 2008? Held that - The issue of taking suo-motu abatement by an assessee operating under Compounded Levy Scheme, has been decided in favour of the assessee by Hon ble Gujarat High Court in the case of Thakkar Tobacco Products Pvt. Ltd. 2015 (11) TMI 319 - GUJARAT HIGH COURT - there is no merit in the appeal filed by the revenue and the same is dismissed. Whether abatement is permissible when machine (s) producing notified goods of a particular MRP have not operated for 15 days or more in a month, though other machines in the same factory are operated during that month? - Held that - Same issue decided in the case of DHARAMPAL SATYAPAL LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE NOIDA 2017 (12) TMI 150 - CESTAT ALLAHABAD , where it was held that The statute has provided specific provision for adjustment of duty - also, the appellant is entitled to rebate/refund of the excess duty paid during the period of closure of their packing machine during the month of July, 2009 as admittedly the said machine remain uninstalled for a continuous period of more than 15 days as required under the Rules - decided in favor of appellant-assessee. Appeal allowed - decided in favor of assessee.
Issues:
1. Whether the assessee rightly took suo-motu abatement under the Pan Masala Packing Rules, 2008. 2. Imposition of penalty by the Commissioner. 3. Permissibility of abatement when machines producing notified goods have not operated for 15 days or more in a month. Analysis: Issue 1: Suo-Motu Abatement The appellant, a Pan-Masala manufacturer, operated under the Compounded Levy Scheme. The dispute arose regarding the alteration in the number of operating packing machines and the duty payment methodology. The revenue alleged non-compliance with the provisions of Rule 7, 8, and 9 of the Pan Masala Packing Rules, 2008, resulting in short payment of duty. The Commissioner confirmed a reduced duty amount under Section 11A of the Act. However, the Tribunal referred to a judgment by the Hon'ble Gujarat High Court in a similar case, ruling in favor of the assessee regarding the right to take suo-motu abatement. Consequently, the Tribunal dismissed the revenue's appeal and allowed the assessee's appeal, granting consequential benefits. Issue 2: Penalty Imposition The Commissioner, in the Order-in-Original, refrained from imposing any penalty on the assessee. The revenue appealed this decision, arguing that there was no case of suppression of facts or contumacious conduct by the assessee. However, the Tribunal upheld the Commissioner's decision, stating that there was no merit in imposing a penalty as there was no evidence of deliberate wrongdoing by the assessee. Issue 3: Permissibility of Abatement The question of whether abatement is permissible when certain machines producing notified goods do not operate for 15 days or more in a month, while other machines in the same factory are operational, was also addressed. The Tribunal referred to a previous judgment in Appeal No. E/2731/2010-EX[DB], where this issue was decided in favor of the appellant-assessee. Consequently, the Tribunal allowed and decided this issue in favor of the appellant-assessee in the current case as well. In conclusion, the Tribunal dismissed the revenue's appeal, allowed the assessee's appeal, and addressed the permissibility of abatement in favor of the appellant-assessee based on relevant legal precedents and interpretations of the Pan Masala Packing Rules, 2008.
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