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2016 (8) TMI 344 - AT - Central ExciseProduction capacity based duty - Quantum - Pan Masala - denial of pro-rata benefit of duty due to failure to pay duty in time - closure of factory for the part of month - Held that - the issue is covered in favour of appellant in the earlier order of Tribunal in Shri Flavours Pvt. Ltd. vs. CCE Delhi-IV 2014 (4) TMI 417 - CESTAT NEW DELHI . Therefore, by following the decision of Hon ble Delhi High Court in the case of CCE Vs. Shakti Fragrances Pvt. Ltd. 2015 (10) TMI 1040 - DELHI HIGH COURT , the failure to make the payment of duty on fifth day of every month cannot result in depriving the assessee of the pro rata abatement of duty which he is in any way entitled to. Hence, the impugned order is set aside and the appellant is required to pay duty on pro-rata basis for 12 working days. - Decided in favour of assessee.
Issues involved:
Calculation of Central Excise duty for a manufacturing unit lying closed for part of the month and in operation for the rest of the month under the Pan Masala Packing Machine Rules 2008. Analysis: The case involved a dispute regarding the payment of Central Excise duty by a Pan Masala manufacturing unit for a month where the factory was closed for a certain period. The appellant contended that they should pay duty on a pro-rata basis for the days the factory was operational, as per the Pan Masala Packing Machine Rules 2008. The appellant had applied for abatement for the days the factory was closed and had received approval for the same from the Assistant Commissioner. The dispute arose when the department demanded additional duty for the period the factory was operational, arguing that duty should be paid for the entire month for certain manufacturing activities. The department issued a show cause notice demanding the short-paid duty, interest, and penalties under various sections of the Central Excise Act and related rules. The Commissioner, in the Order-in-Original, upheld the demand for duty, interest, and penalties. The appellant challenged this decision before the Tribunal, arguing that they were entitled to pay duty on a pro-rata basis as per the Pan Masala Packing Machine Rules 2008. The appellant cited relevant provisions of the rules to support their argument. The Tribunal, after considering the arguments of both parties, referred to a previous decision in a similar case and a judgment of the Delhi High Court. The Tribunal held that the appellant was entitled to pay duty on a pro-rata basis for the days the factory was operational, as per the provisions of the Pan Masala Packing Machine Rules 2008. The Tribunal set aside the impugned order, allowing the appeal in favor of the appellant and granting consequential benefits.
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