2015 (11) TMI 363 - AT - Central Excise

Denial of abatement claim under the Pan Masala Packaging Machines (Capacity Determination and Collection of Duty) Rules, 2008 - Held that - Rule 10 does not use the word single continuous period. It says any continuous period of fifteen days or more. Abatement can be claimed for the period when there is no production only when duty has been paid. If duty is not paid there is no question of granting any abatement. The appellant had paid the duty for the whole month of April before 5th of April. For the period of closure of production during the month of April, he filed application claiming abatement from 16.4.2013 to 30.4.2013. This was filed on 08.05.2013. At that time the closure was continuing and further the duty of May was not yet paid. It is impossible for the appellant to include the closure period in May in that application. - appellant has paid the duty with delay only on 16.05.2013. But the it was paid with interest and respondent has accepted the same. To claim abatement, Rule 10 lays down only two conditions. First, that there is no production during any continuous period of fifteen days or more. Second, that the manufacturer files an intimation to this effect to the Deputy Commissioner or Assistant Commissioner with copy to Superintendent at least three working days prior to the commencement of the said closure period. There is no condition imposed with regard to date of payment of duty. If the manufacturer fails to pay duty within due date he shall be liable to pay the duty alongwith interest. Therefore, the rejection of claim of abatement on this ground is unsustainable. - As per Rule 10 as it stood during the relevant period the appellant was bound to intimate only three days prior to the commencement of closure. The appellant has complied with the same. The Department cannot alter the notice period provided in the law. Therefore, the rejection of claim of abatement on this ground is also found unsustainable. - rejection of claim of abatement is totally unjustified. The impugned order is set aside - Decided in favour of assessee.

Summary

Issues Involved:
1. Denial of abatement of duty under the Pan Masala Packaging Machines (Capacity Determination and Collection of Duty) Rules, 2008.

Detailed Analysis:

1. Abatement Claim and Production Closure Period:
The appellant, a Pan Masala manufacturer, paid duty for April 2013 but did not produce goods from 16.4.2013 to 15.5.2013. Rule 10 allows abatement if no production occurs for a continuous period of fifteen days or more. The appellant filed for abatement for the closure period, which was allowed. The dispute arose for the period 01.05.2013 to 15.05.2013. The Revenue argued that since there was continuous closure from 16.04.2013 to 15.05.2013, the claim period was included in the earlier application. However, the Tribunal clarified that Rule 10 does not require a single continuous period and allows abatement for each period of closure if duty has been paid. The appellant rightly filed a separate claim for the May closure period.

2. Timely Payment of Duty and Abatement Conditions:
The Revenue contended that duty for May was paid late, on 16.05.2013, and hence, abatement cannot be granted. However, Rule 10 only specifies two conditions for abatement: no production for fifteen days or more and prior intimation to authorities. The rule does not mandate a specific duty payment date for claiming abatement. The appellant fulfilled the conditions, and the delay in duty payment with interest, accepted by the department, should not affect the abatement claim.

3. Intimation Period for Production Closure:
The Revenue alleged that the appellant did not inform the Department seven days before the closure period, as required by Rule 10. However, during the relevant period, the rule mandated only a three-day intimation period, which the appellant complied with. The Department cannot impose a different notice period than what the law prescribes. Therefore, the rejection of abatement on this ground was deemed unjustified.

In conclusion, the Tribunal found the denial of abatement unjustified and set aside the impugned order, allowing the appeal with any consequential relief. This detailed analysis clarifies the legal interpretation of the abatement claim under the Pan Masala Packaging Machines Rules, emphasizing compliance with the specific provisions and conditions for claiming abatement of duty.