2018 (3) TMI 175 - AT - Central Excise

Liability of interest - duty late deposited by the respondent for the months May 2015 and June 2015 - sealing of machines - Held that - the respondent was not having any machine in operation during the period 15.04.2015 to 22.05.2015 and 01.06.2015 to 15.06.2015 in May 2015 and June 2015 as the same had been sealed and deemed uninstalled. As such no duty could be discharged in advance. After intimation to the department, the machine was desealed on 23.05.2015 and 15.06.2015 by Range Officer, and during the last 9 days/last fortnight of the respective months, the machine was put to operation and the duty applicable was paid before the end of the respective months, which is before the 5th of the following month - this Tribunal has repeatedly held that the interest liability does not arise as the machine was unsealed and re-installed only after middle of the month or nine days before of the close of the month. Appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against Order-in-Appeal on liability to pay interest on central excise duty.

Analysis:
1. Background: The respondent, a manufacturer of branded Chewing Tobacco, operated under the Compounded Levy Scheme. The central excise duty was deposited on a prorata basis for the operational days of a single track FFS packing machine in May and June 2015.

2. Revenue's Appeal: The Revenue challenged the Order-in-Appeal, contending that the 5th proviso of Rule 9 of CTUTPM Rules, 2010 was wrongly applied by the Commissioner (Appeals). They argued for the application of the 2nd proviso to Rule 8 and cited a judgment by the Delhi High Court.

3. Respondent's Defense: The respondent argued that Rule 6 of the CTUTPM Rules, 2010 outlined provisions for available, installed, and intended-to-operate machines. They highlighted Rule 7 for duty calculation based on operating machines and Rule 8 for non-working machines. Various case laws were cited to support their stance.

4. Tribunal's Decision: The Tribunal noted that the machine was sealed and uninstalled during the relevant periods in May and June 2015. The duty was paid before the end of the respective months after reinstallation. Citing the Trimurti Fragrance Pvt. Ltd. case, the Tribunal held that interest liability does not arise in such cases. Similar views from other cases were also considered.

5. Judgment Comparison: The Tribunal distinguished the case cited by the Revenue, stating that the circumstances were different. The decision of the Commissioner (Appeals) was upheld based on the precedents cited earlier.

6. Final Verdict: Upholding the Commissioner (Appeals) decision, the Tribunal dismissed the Revenue's appeal, finding no infirmity in the order.

This detailed analysis of the judgment provides a clear understanding of the issues involved, the arguments presented by both parties, and the Tribunal's rationale for the final decision, showcasing a thorough examination of the legal aspects and precedents cited during the proceedings.