2017 (12) TMI 490 - AT - Central Excise

Refund - Held that - it had intimated the Department that due to ban of manufacturing of Gutka, it had permanently seized the manufacturing activities with effect from 18.7.2012. Receipt of such letter of the appellant was duly acknowledged by the Department. Further, I also find that the adjudicating authority has also specifically brought out any evidence to show that on 18.7.2012 the appellant had manufactured Gutka by using /utilising machines installed in the factory. Since, it is an admitted fact on record that from 18.7.2012, there was no manufacturing activity undertaken in the factory of the appellant, the duty liability in respect of 19.7.2012 should not be considered for confirmation - Appeal allowed - decided in favor of the assessee.

Summary

Issues:
Calculation of duty liability based on surrender of registration certificate date.

Analysis:
The appellant, engaged in manufacturing Gutka, informed the Central Excise department about seizing manufacturing activities due to a government ban. The appellant deposited duty for the whole of July 2012 but stopped operations for the remaining days. A refund application was filed for non-operational days, which was partially granted. The appellant appealed, arguing that the relevant date for duty calculation should not be 19.7.2012, the surrender date. The Commissioner (Appeals) upheld the decision. The appellant contended that since machines were permanently seized on 18.7.2012, the surrender date should not determine duty liability. The respondent argued that Rule 16 mandates considering the surrender date for duty payment.

The Tribunal found that the appellant had informed about seizing operations on 18.7.2012, acknowledged by the Department. No evidence showed manufacturing occurred after the seizure. As there was no activity from 18.7.2012, the surrender date should not determine duty liability. The Tribunal held that the appellant was entitled to a refund for the duty paid on 19.7.2012. The impugned order was set aside, and the appeal was allowed in favor of the appellant.