2019 (4) TMI 1140 - AT - Central Excise

Refund claim of deposit made - sealing of machinery - requirement of prior intimation - N/N. 42/2008-CE and 30/2008-CE(NT) both dated 01.07.2008 - HELD THAT - According to Rule 10 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 and notification No. 42/2008-CE and 30/2008-CE(NT) both dated 01.07.2008, if a machine does not produce for a continuous period of 15 days, than the duty shall be calculated on proportionate basis and the balance amount of duty shall be abated for the non-production period subject to the condition - The primary condition is that the assessee shall file an intimation to the Deputy/Assistant Commissioner of Central Excise with the copy to the Superintendent of Central Excise at least 3 working days prior to commencement of non-production period and on receipt of such intimation, the Superintendent shall seal and uninstall the PMPM machine under his proper supervision rendering the PMPM machine in-operable during the period of closure. The appellant had given intimation on 1.11.2013 being Friday (1st working days), 2.11.2013 was Saturday (2nd working day) and 4.11.2013 was Monday (3rd working days). Since, appellant had given prior intimation regarding closure of the factory from 5.11.2013 which was well in advance of three working days and sealing, uninstalling and removal of said machine is not under dispute - thus, the provisions of rule 10 of said Rules were fully complied and rejection of refund of substantial amount on plea of non-compliance of procedure of rule 10 of said Rules and interpreting working days as per convenience of Department are not sustainable. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Refund claim for non-production of goods under Rule 10 of Pan Masala Packing Machines Rules, 2008.
2. Compliance with the criteria of providing intimation for non-production period.
3. Interpretation of "working days" under Rule 10.

Analysis:
1. The case involved a refund claim for non-production of goods from a Single Track pouch packing machine under Rule 10 of the Pan Masala Packing Machines Rules, 2008. The appellant had requested to open the machine for production but later decided to close it due to poor uptake. The issue was whether the criteria under Rule 10 were fulfilled for abatement in case of non-production of goods.

2. The Department alleged that the appellant did not fulfill the criteria under Rule 10 as the intimation for non-production was submitted before 2 working days instead of the required 3 working days. The contention was that the intimation was sent on Friday and Monday, with Saturday and Sunday being weekly off days for the jurisdictional office.

3. The respondent argued that the intimation was provided well in advance of 3 working days as required by Rule 10. The Commissioner (Appeals) found that the intimation sent on Friday, Saturday (working day for the factory), and Monday met the criteria. The Commissioner emphasized that "working days" should be understood based on the organization's schedule and cannot be confined to the Central Government's working days.

4. The Tribunal upheld the Commissioner's decision, stating that the intimation provided by the appellant was compliant with the Rule 10 requirements. The Tribunal highlighted that the closure intimation was sent prior to 3 working days, and the sealing and uninstalling of the machine were not in dispute. Therefore, the rejection of the refund claim based on non-compliance with the interpretation of "working days" was deemed unsustainable.

5. Ultimately, the Tribunal dismissed the appeal, concluding that the provisions of Rule 10 were fully complied with, and there was no reason to interfere with the lower authority's decision. The judgment emphasized the importance of considering the organization's working days in interpreting legal requirements.