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2023 (5) TMI 803 - HC - Central ExciseQuantum of duty payable by the respondents - manufacturing and clearing of gutkha under the brand name India Gold - retrospective effect of amended Rule 17(2) of PMPMR-2008 - failure to consider the actual intent of the legislation as mentioned in Rule 17(2) of PMPMR-2008 - HELD THAT - It is material to note that the premises of respondent no. 1 was searched on 04.08.2008. As on the date of the said search, Rule 17 as set out above was applicable. Respondent no. 1 is not registered with the Excise Department and there is no dispute that the Adjudicating Authority has determined the duty payable in terms of Rule 17(2) of the PMPM Rules as in force on the date of the search. It is material to note that Rule 1(2) of the Second Amendment Rules expressly provides that they shall come into force on 20.10.2008 . Thus, the contention that Rule 17(2) as amended by Second Amendment Rules would also apply to searches conducted prior to 20.10.2008 militate against the express language of Rule 1(2) of the Second Amendment Rules. Further, the contention that the language of Rule 17(2) as amended by the Second Amendment Rules, makes it explicit that it would apply from 01.07.2008, is unpersuasive. A plain reading of Rule 17(2) as amended by the Second Amendment Rules indicates that it provides for the manner of computing the duty payable in respect of goods manufactured or cleared from the unit, which is not registered with the concerned Central Excise office - Undisputedly, the duty is liable to be computed on the presumption that the machines found at such premises are in operation since 01.07.2008. The duty is required to be calculated by applying the appropriate rate of duty, as specified in the Notification No. 42/2008 C.E. dated 01.07.2008, to the number of packing machines operating in the factory during that month. In the present case, it cannot be accepted that it is implicit in the provisions of the amended Rule 17(2), that it applies retrospectively for purposes for determination of duty in respect of searches conducted prior to 20.10.2008. Undisputedly, for searches conducted after the Second Amendment Rules came into force, the duty would be determined by assuming unless established to the contrary that the machines found were operative from 01.07.2008 and by applying the computational provisions of Rule 7 of the PMPM Rules. There are no ground to interfere with the impugned order. The questions projected by the Revenue are answered against the Revenue - appeal dismissed.
Issues Involved:
1. Exemption Application 2. Condonation of Delay 3. Determination of Quantum of Duty 4. Imposition of Penalty Summary: Exemption Application: 1. Exemption is allowed, subject to all just exceptions. 2. The application is disposed of. Condonation of Delay:3. For the reasons stated in the application, delay in filing the present appeal is condoned. 4. The application is disposed of. Determination of Quantum of Duty:5. The Revenue filed the appeal under Section 35G of the Central Excise Act, 1944, challenging the final order dated 29.09.2022 passed by the Customs, Excise & Service Tax Appellate Tribunal (the Tribunal). 6. The controversy relates to the quantum of duty payable by the respondents. The Tribunal upheld the Order-in-Original dated 30.11.2017 by the Principal Commissioner Central Tax, determining the duty based on the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 (PMPM Rules) before the Second Amendment Rules came into force on 20.10.2008. 24. The premises of respondent no. 1 was searched on 04.08.2008, and Rule 17 of the PMPM Rules as in force was applicable. The Adjudicating Authority determined the duty payable in terms of Rule 17(2) of the PMPM Rules as on the date of the search. 25-27. The Revenue contended that the duty should be determined based on Rule 17(2) of the PMPM Rules as substituted by the Second Amendment Rules. However, the Tribunal found no error in the Order-in-Original dated 30.11.2017 and rejected this contention, stating that the amended rule does not apply retrospectively. 28-29. The court found no infirmity in the Tribunal's view that the amended Rule 17(2) would not apply to searches conducted prior to 20.10.2008. 30-33. The court emphasized that laws affecting rights apply prospectively unless expressly stated otherwise. The amended Rule 17(2) does not implicitly apply retrospectively for searches conducted before 20.10.2008. 34. The questions projected by the Revenue are answered against the Revenue. 35. The appeal is unmerited and accordingly dismissed. Imposition of Penalty:18. The Tribunal did not consider the imposition of penalty on respondent no. 2 as no submissions were advanced by the Revenue on this issue. The Tribunal found no error in the computation of duty by the Adjudicating Authority. 19. The Revenue accepted the decision of not imposing any penalty on respondent no. 2 but contested the computation of excise duty.
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