2018 (3) TMI 1539 - AT - Central Excise

Refund/Abatement claim - sealing of machinery - non-production of the notified goods - Held that - the Superintendent of Central Excise uninstalled and sealed the FFS machine on 30.08.2016. There was no production of notified goods in their factory premises from 30.08.2016 to 14.09.2016 i.e. continuous period of 15 days - there is no reason to deny the benefit of abatement - appeal allowed - decided in favor of appellant.

Summary

Issues:
Claim for abatement of duty due to non-production of notified goods.

Analysis:
The case involved the appellants engaged in manufacturing Zarda, Scented Tobacco, paying duty under Section 3A of the Central Excise Act, 1944. The appellant claimed abatement of duty due to non-production of notified goods, which was rejected by the Adjudicating authority and upheld by the Commissioner (Appeals). The appellant failed to file intimation for non-production of notified goods as required by Rule 10 of the Chewing Tobacco and unmanufactured Tobacco Packing Machine Rules, 2010. The appellant argued that the sealing of the machine by the Superintendent of Central Excise on the day of non-production should allow for abatement, citing relevant tribunal decisions.

In the case of Rajat Industries Private Limited, the Tribunal held that the abatement of duty cannot be denied if the sealing of the machine is not disputed, even if the intimation for closure was not given three working days prior to the closure. The purpose of the intimation is to enable effective sealing of machines during the closure period. In the present case, the Superintendent sealed the machine on the day of non-production, leading to a continuous period of 15 days without production of notified goods. Thus, the benefit of abatement was granted, and the impugned Order was set aside, allowing the appeal filed by the appellant.

The judgment emphasized the importance of following procedural requirements for claiming abatement of duty due to non-production of notified goods. The decision highlighted that the sealing of machines by the authorities during the closure period is crucial, and technicalities regarding the timing of intimation should not hinder the substantive benefit of abatement as per the relevant rules and tribunal precedents. The ruling provided clarity on the conditions necessary for granting abatement in cases of non-production of notified goods, ensuring fair treatment for manufacturers in such situations.