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2018 (9) TMI 1347 - AT - Central ExciseRefund/abatement of excess duty deposited - manufacture of Pan Masala & Gutka - Compounded Levy Scheme - Section 3A of the Central Excise Act, 1944 read with Notification No. 30/2008-CE(NT) dated 01.07.2008 - Held that - Under the Pan Masala Packing Machines (Capacity Determination & Collection of Duty) Rules, 2008, the period of assessment is Month . Hence, all the provisions for computation of duty have to be read with respect to period of assessment, which is defined as month to month under the scheme of the compounded levy. It is an admitted fact that the Appellants have started production of a new RSP of ₹ 1/- on two machines w.e.f. 12th April, 2013 and further started production on additional two machines of same RSP of ₹ 1/- w.e.f. 17th April, 2013 - Accordingly, in terms of proviso 4 to Rule 9 of the Pan Masala Packing Machines (Capacity Determination & Collection of Duty) Rules, 2008 read with Section 3A of the Act, the duty for the month of April, 2013 is payable on pro rata basis for the number of days the machines were in operation. Appellant is entitled to refund - appeal allowed - decided in favor of appellant.
Issues:
Refund/abatement of excess duty deposited by manufacturer of Pan Masala & Gutka under Section 3A of the Central Excise Act, 1944. Analysis: The appeal involved the issue of refund/abatement of excess duty deposited by the Appellants, who are manufacturers of Pan Masala & Gutka. The Appellants contended that they commenced production of Sada Pan Masala of new retail sale price (RSP) of ?1/- per pouch in April 2013, after a temporary halt due to a ban on Gutka production. They argued that duty should be paid on a pro-rata basis for the days the packing machines were in operation. The Appellants referred to proviso 4 to Rule 9 of the Pan Masala Machines (Capacity Determination & Collection of Duty) Rules, 2008 to support their claim for recalculating duty based on the total number of days in the month and the days of production. The Appellants sought a refund of the excess duty paid due to the change in RSP and the number of operating machines during April 2013. The Appellants claimed that they were entitled to a refund of ?10,26,666/-, representing the excess duty paid beyond the pro-rata calculation for the days of production in April 2013. The Appellants argued that the duty amount of ?56,00,000/- paid for April 2013 was in excess as production of the new RSP started after 11th April 2013, and thus, no duty should be charged for the period prior to that date. The Appellants emphasized that the duty should be recalculated based on the actual days of production and the change in RSP during the month. They contended that the refund should cover the balance amount after adjusting the already granted refund, totaling ?10,26,666/-. The Tribunal analyzed the provisions of the Pan Masala Packing Machines (Capacity Determination & Collection of Duty) Rules, 2008, which define the period of assessment as 'month' under the compounded levy scheme. The Tribunal noted that the Appellants began production of the new RSP of ?1/- on two machines from 12th April 2013 and on additional two machines from 17th April 2013. Based on proviso 4 to Rule 9 of the Rules and Section 3A of the Act, the Tribunal held that duty for April 2013 should be paid on a pro-rata basis for the operational days of the machines. Consequently, the Tribunal allowed the appeal, directing the adjudicating authority to refund the balance amount of ?10,26,666/- to the Appellants within thirty days from the date of the order, along with applicable interest as per Rules. In conclusion, the Tribunal ruled in favor of the Appellants, granting them the refund of the excess duty paid for April 2013 based on the pro-rata calculation of duty for the operational days of the machines producing the new RSP of Pan Masala.
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