2018 (3) TMI 1054 - AT - Central Excise

Abatement - closure of the factory from 10.12.2015 to 31.12.2015 - Rule 10 of the Chewing Tobacco and unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) - Held that - in the event the factory did not produce the notified goods for a continuous period of 15 days or more, the duty calculated on proportionate basis, shall be abated provided the manufacture of such goods files intimation to this effect to the Dept. at least before 3 working days from the commencement of the said period of closure - In the present case, there is no dispute of the fact that the intimation was filed on 4.12.2015 and the machines was sealed under the supervision of the Range Superintendent on 09/10.12.2015. In absence of any other condition, rejecting the appellant s claim of abatement of duty paid during the period of closure of the factory on proportionate basis, on the ground that 8 gms/ 10 gms the pouches with MRP of ₹ 5.00, manufactured on trial run but, without disclosing the same to the Dept., is untenable in law - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Refund claim rejection by the Ld Commissioner (Appeals).
2. Eligibility of abatement claim for factory closure period.

Analysis:
1. The appeal was filed against the order passed by the Commissioner (Appeals) regarding the refund claim made by the appellant. The appellant, engaged in manufacturing unmanufactured tobacco, had intimated the Department about non-production of finished goods during a specific period. The appellant initially declared an MRP of ?3/- for the product but later altered the product to bear an MRP of ?5/-. The Adjudicating Authority sanctioned a refund, which was challenged by the Revenue. The Ld Commissioner (Appeals) allowed the Revenue's appeal, leading to the present appeal. The Ld Advocate for the appellant argued that the closure of the factory was duly intimated, and the rejection of the refund claim was unjustified.

2. The key issue revolved around the eligibility of the appellant to claim abatement for the closure period of the factory. The Rule 10 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) was central to the analysis. The rule stipulates that if a factory does not produce notified goods for a continuous period of 15 days or more, duty can be abated if the manufacturer files an intimation with the concerned authorities prior to the closure period. In this case, the appellant had followed the necessary procedures by intimating the Department and sealing the machines during the closure period. The condition for claiming abatement was met, and the rejection of the abatement claim based on the alteration of product MRP during a trial run was deemed legally untenable. The judgment favored the appellant, setting aside the impugned order and allowing the appeal with consequential relief as per the law.

In conclusion, the judgment addressed the issues of refund claim rejection and abatement claim eligibility, emphasizing the importance of following procedural requirements and the legality of the grounds for rejecting such claims. The detailed analysis of the legal provisions and factual circumstances led to a favorable outcome for the appellant in this case.