2017 (5) TMI 817 - AT - Central Excise

Clandestine manufacture - Chewing Tobacco - production capacity of machine based on speed of machine - Held that - It is admitted position at the time of visit of Chartered Engineer the speed of machines were found as 277.5 PPM, 277 PPM and 279 PPM respectively - the technical literature of the machines provided by the manufacturer shows that the maximum speed of the machines is 280 PPM. As the manufacturer of the machines itself has stated in the technical literature that the maximum speed of the machines is 280 PPM and on physical verification of the machines it was found that the speed of the machines is similar. In that circumstances, the observation made by the Chartered Engineer that the capacity of each machine could be operated to run at a speed of beyond 350 PPM provided the locking i.e. presetting for maximum number of pouches which the machines could be produced rest to higher value by the company or manufacturer of the machines through password and logical sequencing is without any positive evidence. The maximum speed at which machines declared by the appellant in Form-I and Form-II can operate in terms of Rule 6 of the Rules is about 280 PPM at present, till any deviation/alteration is not done in the machines - appeal allowed - decided in favor of appellant.

Summary

Issues:
Change of cause title application; Duty payment based on machine speed; Chartered Engineer's certificate validity; Manufacturer's technical literature; Maximum speed determination; Adjudicating authority's observations in similar cases.

Change of Cause Title Application:
The appellant filed an application for a change of cause title due to proceedings initiated by the office of Commissioner of Central Excise & ST, resulting in a modification of the cause title. The appeal was accepted for disposal under the new cause title.

Duty Payment Based on Machine Speed:
The appellant, engaged in Chewing Tobacco manufacturing, paid duty based on the speed of packing machines. Discrepancies arose regarding the machines' speed, with the Revenue determining a higher speed, leading to a challenge by the appellant.

Chartered Engineer's Certificate Validity:
The Chartered Engineer opined that the machines could operate beyond the determined speed, citing technical aspects. However, the Engineer did not ascertain the Servo Motors' capacity or provide concrete evidence for the potential speed increase, raising doubts on the validity of the certificate.

Manufacturer's Technical Literature:
The manufacturer's technical literature stated a maximum machine speed of 280 PPM, consistent with the physical verification findings. This information contradicted the Chartered Engineer's opinion on potential higher speeds, highlighting a discrepancy.

Maximum Speed Determination:
After considering submissions, it was found that the machines' speed was within the manufacturer's specified limit. The Chartered Engineer's opinion lacked substantial evidence, and the manufacturer's technical literature supported the determined speed, leading to a modification of the adjudication order.

Adjudicating Authority's Observations in Similar Cases:
References to similar cases showed that the adjudicating authority had previously issued specific directives regarding machine speed operations. These observations influenced the modification of the adjudication order in the current case, emphasizing adherence to declared machine speeds.

In conclusion, the judgment addressed various issues related to the change of cause title application, duty payment based on machine speed, validity of the Chartered Engineer's certificate, manufacturer's technical literature, determination of maximum machine speed, and the impact of previous adjudicating authority's observations in similar cases. The decision highlighted the importance of aligning machine speed declarations with technical specifications and manufacturer-provided information to ensure accurate duty assessment.