2018 (8) TMI 775 - AT - Central Excise

Abatement of Duty - machinery continuously sealed for a period of 23 days - denial of abatement on the ground that it cannot be said that it was continuously sealed for more than 14 days as the machine was sealed at two different locations - manufacture of Chewing Tobacco, Zarda Scented Tobacco and Pan Masala containing tobacco - Section 3A of Central Excise Act, 1944 - Held that - The provisions of Rule 10 provided for abatement in case of continuous closure of the factory for a period of 15 days for more - Admittedly, in the present case the machine was sealed for a period of 15 days, though at two different locations. The fact remain that there was no production continuously for a period of 15 days. As such objection raised by the Revenue is hyper-technical and procedural. The shifting of the machine was done under intimation to the Revenue and under their supervision. In such a scenario, it has to be held that the machine in question was continuously sealed for more than 15 days of appellant claim for abatement has to be allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Claim for abatement of duty due to continuous sealing of a machine for more than 14 days.

Analysis:
The appellant, engaged in manufacturing tobacco products, operated under the compounded levy scheme. They requested to discontinue the operation of one machine, which was sealed by the Range Officer on 17/10/2014. Subsequently, the machine was shifted to a new location and sealed there on 05/11/2014. The appellant applied for abatement of duty as the machine was sealed for 23 days, but the claim was denied by the Lower Authorities. The denial was based on the argument that the machine was sealed at two different places, and thus, it was not continuously sealed for more than 14 days. The Lower Authorities and the Commissioner (Appeals) rejected the abatement claim.

Upon review, the Tribunal noted that Rule 10 allowed for abatement in cases of continuous closure of a factory for 15 days or more. While the machine was sealed for 15 days at two different locations, there was no continuous production for 15 days. The Tribunal found the Revenue's objection to be hyper-technical and procedural. The machine's shifting was done under Revenue's supervision, and it was continuously sealed for more than 15 days. Therefore, the Tribunal held that the appellant's claim for abatement should be allowed. The impugned order was set aside, and the appeal was allowed with consequential relief to the appellant.