2017 (3) TMI 1198 - AT - Central Excise

Compounded scheme - non-payment of duty by the respondent for the period July and August, 2008 in terms of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008, effective from 1.7.2008 - The case of the Revenue is that the exports said to have been made by the respondent without payment of duty are not permissible during the relevant time - demand - Held that - Regarding the applicability of the bar for export of the Pan Masala without payment of duty, introduced by way of Rule 14 A of the said Rules w.e.f. 5.3.2009, we note that the same cannot be given retrospective effect. There is nothing to indicate that the said insertion in the rules is to clarify an already existing legal principles - demand set aside - appeal dismissed - decided against Revenue.

Summary

Issues: Dispute regarding non-payment of duty on Pan Masala exported during July and August, 2008 under Pan Masala Packing Machines Rules, 2008; Applicability of Rule 14 A introduced w.e.f. 5.3.2009 as clarificatory; Jurisdictional Asstt. Commissioner's authorization for export; Retrospective application of Rule 14 A; Allegation of non-export or clearance to domestic market by Revenue.

Analysis:
The case involved a dispute over the non-payment of duty by a Pan Masala manufacturer for exports made during July and August, 2008 under the Pan Masala Packing Machines Rules, 2008. The Revenue contended that the exports made without payment of duty were impermissible during that time and should have been subject to duty by the 5th of the relevant month. The Commissioner had initially dropped the duty demand, stating that the Pan Masala exported during the specified period did not fall under the duty scheme. The Revenue argued that the subsequent insertion of Rule 14 A in 2009 should be considered clarificatory, and the exports should have been subject to duty. However, the respondent's advocate argued that the exports were authorized by the jurisdictional Asstt. Commissioner and that the retrospective application of Rule 14 A was not valid as it did not clarify existing legal principles.

During the proceedings, both sides presented their arguments, with the Revenue emphasizing that duty should have been confirmed by the Original Authority. On the other hand, the respondent's advocate highlighted that the exports were authorized and evidenced by CT-1s issued by jurisdictional officers, with no evidence presented by the Revenue to contradict the exports or prove clearance to the domestic market. The advocate also argued against the retrospective application of Rule 14 A, stating that it did not clarify existing legal principles and could not be applied retrospectively.

After hearing both sides and reviewing the appeal records, the tribunal found no merit in the Revenue's appeal. The tribunal held that the exports made by the respondent during July and August, 2008 were not disputed, and there was no evidence to contradict the factual findings recorded by the Original Authority. The tribunal also concluded that the insertion of Rule 14 A in 2009 could not be given retrospective effect as it did not clarify existing legal principles. Therefore, the tribunal dismissed the Revenue's appeal, upholding the findings of the impugned order.