2013 (1) TMI 356 - AT - Central Excise

Abatement of duty in case of non-production of goods - Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty), Rules, 2008 Whether continuous non-production of excisable goods for 15 days should be during a calendar month - Assessee is engaged in manufacture of Gutkha - Duty on the basis of packing machine - Excisable item, under Chapter 24 - Department argued that 15 days continuous period of non-production which entitle the assessee to abatement has to be in a given calendar month Appellant s factory was closed for the period 1-3-2011 to 10-4-2011 Revenue denied for abatement of 10 days of April,2011 under Rule 10 Held that - The plea taken by department misconceived and is based on incorrect reading of Rule 10. Bare reading of the Rule shows, an assessee is entitled to abatement provided there has been no production in the factory for a continuous period of 15 days. The rule nowhere provides that continuous non-production of excisable goods should be during a given calendar month. There was no production in the factory of the assessee for a continuous period of more than 15 days, the benefit of abatement shall be allowed also for 10 days for the month of April, 2011. Therefore, claim of the assessee for abatement is fully justified. In favour of assessee

Summary

Issues:
Interpretation of Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 for abatement claim.

Analysis:
The appeal involved the interpretation of Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008. The respondent sought abatement of excise duty under this rule due to the factory's non-production of goods for a continuous period of 15 days. The department contended that the non-production period should be within a given calendar month to qualify for abatement. The Assistant Commissioner denied the abatement claim as the production halt was only for 10 days in April 2011. The Commissioner (Appeals) partially allowed the abatement claim, leading to the appeal.

The Tribunal examined the facts and the rule in question. It was established that the respondent's factory had no production for a continuous period of 36 days, during which all the Gutkha sealing machines were sealed. The Tribunal emphasized that Rule 10 does not specify that the non-production period must be within a particular calendar month. As the rule requires only a continuous 15-day non-production period, the respondent's claim for abatement was deemed valid. Consequently, the Tribunal upheld the Commissioner (Appeals)' decision to allow the abatement, dismissing the appeal.

In conclusion, the Tribunal clarified that the abatement claim under Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 is justified when there is a continuous non-production period of 15 days, regardless of the calendar month. The appeal was dismissed as the respondent's abatement claim was found to be valid based on the rule's clear provisions.