2017 (8) TMI 995 - AT - Central Excise

Valuation - manufacture of Pan Masala - Kamla Pasand - new Retail Sale Price Product getting manufactured on the existing machine - interpretation of statute - Held that - Id. Commissioner (Appeals) has interpreted that first proviso to Rule 8 of PMPM Rules, 2008 indicates that single operating pouch packing machine should be treated as two machines only if product with new MRP is manufactured and duty in respect of two operating pouch packing machines for the two months in view of said first proviso to Rule 8 of PMPM Rules, 2008 shall be payable - the interpretation given by Id. Commissioner (Appeals) in the impugned Order-in-Appeal dated 19/04/2011 is correct interpretation of the provision of said proviso to Rule 8 of PMPM Rules, 2008 - appeal dismissed - decided against Revenue.

Summary

Issues: Interpretation of Rule 8 of PMPM Rules, 2008 regarding duty liability for manufacturing different products with the same Retail Sale Price on a single machine.

Detailed Analysis:

1. Facts of the Case:
- The case involved a dispute where the respondents manufactured Pan Masala with and without tobacco under the same brand name and Retail Sale Price of ?5 on a single pouch packing machine.
- The Revenue contended that this activity attracted the proviso to Rule 8 of Pan Masala Packing Machines (Capacity determination & Collection of Duty) Rules, 2008, which required duty payment for two machines.

2. Appeal Process:
- The respondents challenged the Show Cause Notice, arguing that as both products had the same Retail Sale Price, the proviso to Rule 8 was not applicable.
- The Original Authority upheld the demand, which was further confirmed by the Commissioner, imposing penalties.
- The Commissioner (Appeals) set aside the order, emphasizing the need for a new Retail Sale Price to trigger duty liability as per Rule 8.

3. Grounds of Appeal by Revenue:
- The Revenue appealed, arguing that the Commissioner's decision was incorrect as the Retail Sale Price could apply to multiple notified goods, not dependent on the nature of goods.
- They contended that the assumption of changed Retail Sale Prices due to manufacturing different goods on the same machine was unfounded.

4. Judgment by the Tribunal:
- The Tribunal analyzed the proviso to Rule 8 and agreed with the Commissioner (Appeals) that duty liability arises only when a new Retail Sale Price product is manufactured on an existing machine.
- Upholding the interpretation, the Tribunal dismissed the Revenue's appeal, finding no merit in their arguments.

5. Conclusion:
- The Tribunal's decision clarified that the duty liability under Rule 8 of PMPM Rules, 2008 is triggered by the introduction of a new Retail Sale Price product on an existing machine, not merely by manufacturing different goods with the same Retail Sale Price.

This detailed analysis highlights the key legal interpretation regarding duty liability under Rule 8 of PMPM Rules, 2008 in the context of manufacturing products with the same Retail Sale Price on a single machine.