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2017 (10) TMI 1039 - AT - Central ExciseRefund claim - closure of machinery - Pan Masala - proviso 4 to Rule 9 of Pan Masala Packing Machines (Capacity Determination & Collection of Duty) Rules, 2008 - Held that - Admittedly, in this case, the respondent has permanently discontinued the manufacturing of Pan Masala having RSP ₹ 3/- per pouch on 9th October, 2013 and paid duty for whole of the month. In terms of the said Rule, the respondent is required to pay duty on pro-rata basis and since they have paid excess duty, they are entitled for refund - appeal dismissed - decided against Revenue.
Issues: Refund claim under Pan Masala Packing Machines Rules, 2008 - Entitlement for abatement claim on factory closure - Interpretation of proviso 4 to Rule 9.
Analysis: 1. The case involved an appeal by the Revenue against the order allowing a refund claim filed by the respondent under the Pan Masala Packing Machines (Capacity Determination & Collection of Duty) Rules, 2008. The respondent, engaged in Pan Masala manufacturing, discontinued a machine and sought a refund for the duty paid during the closure period. 2. The Revenue contended that as per Rule 10 of the Rules, the respondent was not entitled to an abatement claim as the factory was not closed during the relevant period. On the other hand, the respondent argued that proviso 4 to Rule 9 applied to their case, allowing for a refund claim due to the permanent discontinuation of manufacturing Pan Masala with a specific retail sale price. 3. The Tribunal analyzed proviso 4 to Rule 9, which stated that if a manufacturer permanently discontinues manufacturing goods of a particular retail sale price during a month, the duty liability for the month should be recalculated on a pro-rata basis. In this case, the respondent ceased manufacturing Pan Masala with a specific retail sale price, paid duty for the entire month, and was entitled to a refund for the excess duty paid. 4. The Tribunal upheld the decision of the ld. Commissioner (Appeals) to allow the refund claim, stating that the respondent met the conditions outlined in proviso 4 to Rule 9. Therefore, the Tribunal dismissed the Revenue's appeal, affirming the entitlement of the respondent to the refund under the Pan Masala Packing Machines Rules, 2008.
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