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2018 (1) TMI 346 - AT - Central ExciseInterest on account of late remittance of central excise duty - 3rd proviso to Rule 9 of Pan Masala (Capacity Determination & Collection of Duty) Rules, 2008 - whether the Central Excise duty is to be paid on 5th of a particular month if the packing machines are reinstalled during that month after the 5th of that month or before 5th of the next month? - Held that - The issue is no more res-integra, in view of above stated decision of this Tribunal in the case of Trimurti Fragrance Pvt. Ltd. 2016 (2) TMI 718 - CESTAT NEW DELHI , where it was held that whenever the machines were re-installed in the factory the Central Excise duty was paid on 5th of next month and therefore, there was no interest payable by them and the duty was paid properly - interest upheld - duty demand set aside - appeal allowed in part.
Issues involved:
1. Short payment of duty in May 2011 and subsequent proceedings. 2. Applicability of proviso 3 to Rule 9 of Pan Masala Rules, 2008. 3. Due date for monthly duty deposit in case of machine installation. 4. Payment of duty on re-installation of packing machines. 5. Liability for interest on duty payment. Issue 1: Short payment of duty in May 2011 and subsequent proceedings: The appellant intimated a duty payment through e-payment for 16 days in May 2011, resulting in short payment for 15 days. The appellant later deposited the differential duty along with interest under protest. Show Cause Notices (SCNs) were issued proposing duty recovery, interest, and penalty. The Adjudicating Authority confirmed the demands, but the Commissioner (Appeals) allowed relief in respect of the demand, interest, and penalty. The Tribunal concurred with the Commissioner's findings, setting aside the demand and interest, as the duty was already paid and abatement allowed. Issue 2: Applicability of proviso 3 to Rule 9 of Pan Masala Rules, 2008: The Commissioner's decision in a related case regarding the due date of monthly duty payment for machines installed was analyzed. The Tribunal agreed with the finding that the due date for payment of duty in the present case was correctly determined. It was established that the duty for machines installed in May 2011 was payable by a specific date. The Tribunal also held that the appellant was not required to pay duty for the period of closure, following judicial precedents. Issue 3: Due date for monthly duty deposit in case of machine installation: The Tribunal clarified that duty payment for machines re-installed in the factory should be made by the 5th day of the following month. Relying on precedent decisions, the Tribunal set aside the order requiring the appellant to pay interest on duty paid before the 5th of the next month. The appellant was granted consequential relief based on settled legal positions. Issue 4: Payment of duty on re-installation of packing machines: The appellant argued that Central Excise duty should be paid on the 5th of the month if packing machines are reinstalled during that month. Citing a previous Tribunal decision, the Tribunal agreed with the appellant's position and set aside the order requiring interest payment on duty paid before the 5th of the following month. Issue 5: Liability for interest on duty payment: The Tribunal ruled that interest on the net duty payable for the month should be calculated from the 6th day of the month to the date of actual payment. The demand for interest on the duty demanded in the notices was set aside. The appellant was held liable for interest on the net amount of duty payable for the respective months. This detailed analysis of the judgment covers the various issues involved and the Tribunal's findings on each aspect of the case.
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