2018 (2) TMI 389 - AT - Central Excise

Interpretation of statute - 1st proviso to Rule 10 of Pan Masala Packing Machine (Capacity Determination and Collection of Duty) Rules, 2008 - abatement - removal of non-notified goods - whether prohibited or not? - Held that - if non notified goods are prohibited from removal during the closer of factory or when the machines manufacturing the notified goods are sealed then such interpretation will mean that the rules have provided such provisions which are beyond the provision under Sub-section (3) of Section 3A of the Act and therefore it cannot be interpreted that even if non notified goods are removed, the said 1st proviso to Rule 10 prohibits abatement - appeal allowed.

Summary

Issues: Interpretation of 1st proviso to Rule 10 of Pan Masala Packing Machine (Capacity Determination and Collection of Duty) Rules, 2008 for different periods.

In this judgment by the Appellate Tribunal CESTAT, ALLAHABAD, two appeals were considered together due to a common issue regarding the interpretation of the 1st proviso to Rule 10 of Pan Masala Packing Machine Rules for different periods. The appellants were manufacturers of Pan Masala and Pan Samagri, with the former being notified under Section 3A of the Central Excise Act, 1944, while the latter was not notified. The dispute arose over the abatement claimed by the appellants for specific periods. The first Appellate Authority had ruled that no goods, even non-notified ones, should be cleared to qualify for abatement under Rule 10. The appellant argued that the use of the term "goods" instead of "notified goods" in the rules allowed for the clearance of non-notified goods. They contended that prohibiting the removal of non-notified goods during factory closure or machine sealing would contradict the Act's provisions.

The Learned Counsel for the Appellant highlighted the use of the term "goods" in the rules and argued that prohibiting non-notified goods' removal during factory closure or machine sealing would go against the Act's provisions. On the other hand, the Learned A.R. contended that the proviso explicitly stated that both notified and non-notified goods should not be manufactured or removed. After considering the arguments, the tribunal concluded that interpreting the proviso to prohibit the removal of non-notified goods during factory closure or machine sealing would exceed the Act's provisions under Section 3A(3). Therefore, the tribunal allowed both appeals filed by the appellant, granting them entitlement to consequential relief as per the law.