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2014 (7) TMI 394 - AT - Central ExciseWaiver of pre-deposit - Demand of differential duty - penalty under Rule 17 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 - Change in product price from higher value Retails Sale Price (RSP) to lower value RSP - Held that - On perusal of the records and taking specific example in the manufacture of January 2012, we find that the appellant has specifically informed the Deputy Commissioner as to intend of manufacturing gutkha on all three machines at retail price of ₹ 1.50 per pouch for the first 8 days and subsequently on 2 machines at retail sale price of Re. 1/- and other retail sale price of ₹ 2/-. As per the provisions of PMPM Rules read with Notification No. 42/2008-C.E., dated 1-7-2008 and read with Section 3A of the Central Excise Act, Central Excise duty liable to be paid by assessee is on the goods manufactured - duty liability discharged by the appellant for January, 2012 based on their calculation of manufacturing seems to be correct and same findings can also be applied for the demand for month of April, 2012. Prima facie, we are of the view that the demand of duty as confirmed by adjudicating authority does not have any stand - Stay granted.
Issues:
Waiver of pre-deposit of Central Excise duty, interest, and penalty under PMPM Rules based on change in product price and duty calculation. Analysis: The stay petition was filed seeking waiver of pre-deposit of an amount confirmed as differential Central Excise duty, interest, and penalty under Rule 17 of Pan Masala Packing Machines (PMPM) Rules, 2008. The adjudicating authority confirmed the dues due to a change in product price by the appellant in January and April 2012, leading to the requirement to pay duty as per Rule 9 of the PMPM Rules. The appellant argued against the demand, highlighting discrepancies in the department's calculation and referring to Rule 6(6) of the PMPM Rules to support their case. The Revenue, on the other hand, contended that there was no permanent discontinuation of manufacturing as required by the proviso to Rule 9 of the PMPM Rules. Upon considering the submissions and examining the records, the Tribunal found merit in the appellant's contentions. The appellant had informed the Deputy Commissioner of the manufacturing intent for gutkha at different retail prices on their three machines, indicating that the machines could not have simultaneously produced gutkha at different maximum retail prices. The Tribunal analyzed the provisions of the PMPM Rules, Notification No. 42/2008-C.E., and Section 3A of the Central Excise Act to determine the duty liability based on the goods manufactured. It was observed that the duty liability discharged by the appellant for January 2012 was correct, and the same analysis applied to the demand for April 2012. The Tribunal concluded that the demand of duty as confirmed by the adjudicating authority lacked merit. Consequently, the application for waiver of pre-deposit was allowed, and the recovery of the amounts involved was stayed pending the disposal of the appeal. In conclusion, the Tribunal's decision to grant the waiver of pre-deposit was based on the analysis of the appellant's manufacturing process, the provisions of the PMPM Rules, and the duty liability calculation. The Tribunal found that the demand of duty lacked a legal basis, leading to the stay of recovery until the appeal's final resolution.
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