2018 (7) TMI 1777 - AT - Central Excise

Refund claim - sealing of machinery - manufacture of Pan Masala - Gutkha - Rule 10 of Pan Masala Packing Machine Capacity Determination and Calculation of Duty Rules 2008 - denial of refund on the ground that in terms of the said rule they should have given three days prior intimation for sealing of the machine which condition was not followed by them - Held that - The appellant admittedly approached Revenue on 31/08/2010 for sealing of the machine which was actually sealed on 01/09/2010. Further there was admittedly no production during the period of September 2010 thus making the appellant entitled to refund of duty already deposited by them by extending the abatement in terms of Rule 10. Merely because the intimation which is primarily for the purpose of facilitation of sealing process was not given in advance by three days it cannot be adopted as a ground for rejection of abatement especially when such request of the assessee was accepted by the Range Authorities and the machine was actually sealed. Refund cannot be denied - appeal allowed - decided in favor of appellant.

Summary

Issues:
Request for adjournment by the appellant; denial of refund claim based on non-compliance with intimation requirement for sealing the machine; interpretation of Rule 10 regarding abatement in case of non-production of goods.

Analysis:
The appellant, engaged in manufacturing Pan Masala containing tobacco "Gutkha," requested to seal their machine as they did not intend to produce notified goods. The machine was sealed on 01/09/2010, and production activities were suspended for the whole of September 2010. A refund claim of &8377;12.50 lakhs was filed under Rule 10 of the Pan Masala Packing Machine "Capacity Determination and Calculation of Duty" Rules, 2008, due to non-production of goods for over 15 days. The claim was denied by lower authorities citing lack of three days prior intimation for sealing the machine, as required by the rule. The denial was upheld by the Commissioner (Appeals), leading to the present appeal.

The Tribunal noted that the appellant did not appear for the hearing or request an adjournment. However, considering the narrow issue at hand, the appeal was deemed fit for disposal even in the absence of the appellant. It was undisputed that the machine was sealed on 01/09/2010, and no production occurred in September 2010, entitling the appellant to the refund as per Rule 10. The Tribunal emphasized that the purpose of the three days' notice requirement was for the facilitation of the sealing process, and the lack of prior intimation should not be a ground for rejecting abatement, especially when the request was accepted by the Range Authorities and the machine was sealed accordingly. The Tribunal held that once the machine is sealed, abatement cannot be denied solely based on the timing of the intimation.

Consequently, the Tribunal found no justifiable reasons to deny the abatement to the appellant. The impugned order was set aside, and the appeal was allowed with consequential relief granted to the appellant.