2024 (5) TMI 804 - AT - Central Excise

Abatement claim - entire manufacturing process in the factory has remained closed for the period from 17.10.2014 to 31.10.2014 - Rule 10 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules - HELD THAT - Firstly there is no denying of the fact that the manufactured goods which were in the stock were duty paid goods and the Rule 10 only provides a facility that if the assessee has any order pending for dispatch of the goods in that case they are free to clear the goods within the first two days, it has not been stipulated that all the goods which are manufactured and pending in the stock are to be cleared within a period of two days. It is important to take note that Rule 10 only mentions the word May that itself signifies that the manufacture is free to avail facility of clearing the goods for two days at the commencing of the closer period. This provision basically meet the requirement of dispatches of the goods or sale of the goods to match the requirement of pending dispatch orders. It is settled Principal of the law that the word as provided in the statute or notification has to be read as it is rather than basically interpreting them in different way Hon ble Supreme Court in case of BANSAL WIRE INDUSTRIES LTD. VERSUS STATE OF UP. 2011 (4) TMI 77 - SUPREME COURT has held that ' It is a settled principle of law that the words used in the section, rule or notification should not be rendered redundant and should be given effect to. It is also one of the cardinal principles of interpretation of any statue that some meaning must be given to the words used in the section. Expression Wire rods and wires which is mentioned in item no. (xv) would not and cannot cover the expression tools, alloy and special steels of entry no. (ix) nor it would refer to the expression Iron and Steel as each item used in entry nos. (ix) and (xv) are independent items not depending on each other at all.' Rule 10 provides that assessee May clear the goods for first two days of the commencement of the closer period, it does not mean that all the manufactured/ stocked goods need to be cleared within two days. The appellant have fulfilled all the conditions of Rule 10 of the Tobacco Manufactured Rules, 2010 - Therefore, they are entitled for the abetment of the duty for the closer period of the manufacturing machines. The impugned order in appeal is without any merit and the same is set aside - Accordingly the appeal is allowed.

Summary

Issues involved:
The issues involved in the judgment are the rejection of abetment claim by the appellant under Rule 10 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules 2010, based on the closure of the factory and the interpretation of the provisions of Rule 10 regarding the removal of notified goods within a specified period.

Summary of Judgment:

Issue 1: Rejection of Abetment Claim
The appellant, engaged in manufacturing chewing tobacco, submitted a declaration for closing their factory and later requested dieseling of machines. The abetment claim for duty refund due to factory closure was rejected by the Deputy Commissioner and Commissioner (Appeals). The appellant contended that the impugned order violated principles of natural justice and fulfilled all conditions under Rule 10 for duty abetment.

Details:
The appellant fulfilled the conditions of Rule 10 by providing prior intimation of factory closure and seeking abetment for the period of non-production of notified goods. The dispute arose as the appellant did not clear all manufactured goods within two days of closure, as required by the Rule. The appellant argued that the use of "May" in the Rule grants discretion for removal of goods within two days, not mandating clearance of all goods within that period.

Issue 2: Interpretation of Rule 10 Provisions
The Tribunal analyzed Rule 10, emphasizing the requirement of prior intimation for factory closure and the provision allowing removal of notified goods within two days of closure. The Commissioner (Appeals) rejected the abetment claim based on the appellant's failure to clear all goods within the specified period.

Details:
The Tribunal noted that the Rule provides flexibility for clearing goods within two days, not mandating clearance of all goods within that period. Citing legal principles, the Tribunal held that the word "May" in the Rule should be interpreted as granting discretion to the manufacturer, not imposing a strict obligation to clear all goods within two days. As the appellant complied with the Rule's conditions, they were entitled to duty abetment for the factory closure period.

Conclusion:
The Tribunal found merit in the appellant's arguments and set aside the impugned order, allowing the appeal for duty abetment. The judgment was pronounced in the open court on 15.05.2024.

Note: The separate judgment was delivered by the Tribunal, consisting of Hon'ble Mr. Ramesh Nair, Member (Judicial), and Hon'ble Mr. C. L. Mahar, Member (Technical).