2017 (10) TMI 13 - AT - Central Excise

Capacity of production - duty short paid was demanded on the same allegation of the machine being double track instead of singe track, along with penalty - whether the one packing machine in question, is a single track machine or a double track machine? - Held that - the issue has been decided by the Hon ble Allahabad High Court in the case of Commissioner of Central Excise Vs Dharampal & Satyapal Ltd. 2015 (10) TMI 1105 - ALLAHABAD HIGH COURT , where it was held that the machine purchased by the assessee is a single track machine, the duty payable by the assessee on the basis of a single track machine, should have been levied. The Commissioner fell in error in treating the said machine as a two track machine - appeal dismissed - decided against Revenue.

Summary

Issues:
Capacity of production - Single track machine vs. double track machine determination under PMPM Rules.

Analysis:
The appeal concerns the capacity of production regarding a packing machine and whether it should be classified as a single track or a double track machine under the Pan Masala Packing Machine (PMPM) Rules. The High Court in an earlier case observed that the machine in question, despite having an innovative feature of cutting and filling two pouches simultaneously, operates on a single track. The Tribunal emphasized that the distinction between single and multiple track machines is crucial for duty determination, not the number of pouches produced. The duty is fixed per packing machine per month, as clarified by a circular from the Central Excise and Customs Board. The Tribunal's finding that the machine is a single track one was upheld, leading to the Commissioner's order being overturned. The High Court affirmed this decision, stating no substantial question of law arises.

Furthermore, a review conducted by the Deputy Commissioner without issuing a show cause notice was challenged by the respondent-assessee, leading to its set aside by the Commissioner (Appeals). The matter also involved a show cause notice for duty short paid due to the machine's alleged classification as a double track. The High Court's decision in another case reinforced the Tribunal's finding that the machine is a single track one, thereby dismissing the Revenue's appeal as inconsequential.

In conclusion, the judgment clarifies the classification of the packing machine as a single track machine based on technical specifications and upholds the duty determination as per the PMPM Rules. The legal proceedings highlighted the importance of accurate classification for duty calculation and affirmed the Tribunal's decision in favor of the assessee.