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2019 (7) TMI 1403 - AT - Central ExciseValuation - MRP based valuation or not - manufacture of Pan Masala - different RSP of Pan Masal - retrospective amendment brought to 1st proviso to Rule 8 of the PMPM Rules, 2008, w.e.f. 13.04.2010, by virtue of Section 109 read with 4th Schedule of Finance Act No.2 of 2014 - effect of amendment. If Pan Masala when packed in the pouches of different RSPs using same machine during the month, then whether duty should be paid on pro-rata basis attributable to the number of days used for manufacturing a particular RSP or duty required to be paid considering that pouches with new RSP is manufactured for the whole month as if a new machine deemed to have been used for the purpose of packing Pan Masala? HELD THAT - The learned A.R. for the Revenue has fairly submitted that the impugned orders have been passed much earlier to the Finance Act, 2014 and since the amendment brought to Rule 8 has been made effective retrospectively i.e. from 13.04.2010, therefore, the matter be remanded to the Adjudicating authority for considering the said amendment and decide the issue accordingly. There is no objection from the learned Advocate for the Appellant - the said issue remanded to the Adjudicating authority for determination afresh the same in the light of retrospective amendment. Abatement on sealing of machines - Revenue s contention is that if one machine is sealed and the remaining machines available in factory are functional, then abatement for the closure period for that machine is not allowed, unless the factory as a whole remain closed for the period for which the abatement is claimed - HELD THAT - A plain reading of Rule 10 of PMPM Rules, 2008 makes it clear that unless all packing machines available in the factory have been sealed and factory remains completely closed, abatement for the sealing of one machine cannot be allowed - Since we are remanding the matter to the Adjudicating authority, the issue of abatement may also be considered. Appeal allowed by way of remand.
Issues involved:
1. Interpretation of provisions of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008. 2. Application of duty on pouches with different Retail Sale Prices (RSPs) packed using the same machine. 3. Retrospective amendment to Rule 8 of the PMPM Rules, 2008. 4. Abatement in case of non-production of goods and sealing of machines. Issue 1: Interpretation of PMPM Rules, 2008 The case involved the interpretation of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008, specifically focusing on the provisions related to the duty levied when a manufacturer commences manufacturing or packing pouches with a new Retail Sale Price (RSP) during the month on an existing machine. The Assessee argued that the provisions required duty payment based on the commencement of manufacturing with a new RSP on an existing machine, and they deemed a machine as two when introducing a new RSP, complying with the rules. They also highlighted their compliance with the duty payment on a pro-rata basis for pouches with a specific RSP. Issue 2: Application of duty on pouches with different RSPs A key contention was whether duty should be paid on a pro-rata basis based on the number of days a machine was used for manufacturing a particular RSP or if duty should be paid as if a new machine was used for the entire month when packing pouches with different RSPs. The retrospective amendment to Rule 8 of the PMPM Rules, 2008, effective from 13.04.2010, was crucial in determining the duty applicable to pouches with the highest RSP for the whole month when a manufacturer uses a machine to produce pouches with different RSPs. Issue 3: Retrospective amendment to Rule 8 The retrospective amendment to Rule 8 of the PMPM Rules, 2008, effective from 13.04.2010, mandated that a manufacturer using a machine to produce pouches with different RSPs during a month should pay duty applicable to the pouch with the highest RSP for the entire month. This amendment was significant in the case and required reevaluation by the Adjudicating authority in light of the retrospective change. Issue 4: Abatement in case of non-production of goods and sealing of machines The discussion also encompassed the provision for abatement in case of non-production of goods and sealing of machines under Rule 10 of the PMPM Rules, 2008. The rule clarified that abatement for sealing of one machine could only be allowed if all packing machines in the factory were sealed, and the factory remained completely closed. This issue was to be considered along with the other matters upon remand to the Adjudicating authority. In conclusion, the judgment remanded all issues to the Adjudicating authority for further consideration in light of the retrospective amendment and other legal provisions discussed during the case.
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