9911796707
TMI Blog2012 (9) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... f interest and penalty shall stand waived and recovery thereof stayed till the disposal of the appeal. Decision in favour of revenue. - Excise Appeal No.209 of 2012 - 1073/2012 EX(BR) - Dated:- 11-7-2012 - Ajit Bharihoke, Rakesh Kumar, JJ. For Appellant: Shri Pradeep Jain, Adv. For Respondent: Shri I Baig, AR Per: Rakesh Kumar: The facts giving rise to this appeal and stay application, are, in brief, as under:- 1.1 The Appellant manufacture gutka i.e. pan masala containing tobacco chargeable to duty under sub-heading 24039990 of the Central Excise Tariff. The period of dispute is from May 2010 to Sept. 2010. 1.2 With effect from 01.7.2008 duty on gutka and pan masala in being levied under Section 3A of the Central Excise Act, 1944 read with Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 (hereinafter referred to as PMPM Rules) notified under Notification No. 30/08-CE (NT) dated 01.07.2008. Under Rule 6 of PMPM Rules, a manufactured pan masala gutka is required to file a declaration in a prescribed form to jurisdictional Assistant/Deputy Commissioner containing the required details the main information being t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the months worked only for part of the month, paid duty on pro-rata basis for the portion of the month for which the same had been operated and on this basis, paid total duty of Rs.4,50,00,000/- during May 2010 - Sept. 2010 period. According to Department, the Appellant were liable to pay duty on each machine which had operated during the month, as if the same operated during the whole of the month, even if on account of being sealed, it had actually been operated only for part of the month. It is on this basis, that a show cause notice dated 6.5.2011 was issued to the Appellant for (a) recovery of short paid central excise duty amounting to Rs.1,12,50,000/- alongwith interest under Section 11AA; and (b) imposition of penalty on the Appellant under Rule 17 of PMPM Rules. 1.4 The above show cause notice was adjudicated by the Commissioner, Central Excise Delhi-I vide order-in-original dated 31.10.2011 by which- (a) the duty demand of Rs.1,00,00,000/- was confirmed against the Appellant under Section 11A of the Central Excise Act, 1944 read with Rules, 7, 8, 9 18 of PMPM Rules, alongwith interest on the duty under Section 11AA of the Act, and (b) Imposed penalty of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, that the impugned order, prima-facie, is contrary to the provisions of law, that the Appellant have a strong prima-facie case in their favour and, therefore, the requirement of pre-deposit of duty demand, interest and penalty may be waived for the hearing of the appeal and recovery thereof may be stayed till the disposal of the appeal. 4. Sh. I. Baig, the learned Senior Departmental Representative, opposed the stay application by reiterating the findings of the Commissioner in the impugned order and emphasized that- (a) This case is not the case where entire factory was closed for a continuous period of 15 days or more and during which period, there was no production and no clearance and therefore Rule 10 of PMPM Rules has no application for this case; (b) In this case, only certain machines had been sealed for part of the month and for that period had not been operated, but in view of 2nd proviso to Rule 8, even of a machine has worked only for a part of the month, it has to be treated as having worked during the whole of the month; (c ) While in term of Rule 7 of PMPM rules, the duty payable by a Pan masala unit in a month is to be determined by applying the appropria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 respectively. Since the Appellant were manufacturing Gutka pouches of MRP of Rs. 1/- per pouch, the rate of duty per operating machine per month under Notification No. 42/2008-CE was Rs. 12/- lakhs. On this basis, according to Department, the Appellant's duty liability for May 2010 - September 2010 would be Rs. 5.5 cr. and since the Appellant have paid duty of Rs. 4.5 crore only, the duty demand of Rs. One crore has been confirmed against them. However, it is not disputed by either side that during each month during the period of dispute, certain number of machines had been got sealed and these machines had not been operated for the whole month but had been operated only for part of the month. The point of dispute is as to whether in respect of such machines the duty would be payable only on pro-rata basis for the number of days in the month during which the machine had functioned or would be payable for the whole month without giving abatement for the period for which the machine was sealed. 6. The only provision for abatement is PMPM rules is in rule 10 but for invoking this rule - (a) the entire factory must be closed for a continuous period of 15 days or more; (b) dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a manufacturer is manufacturing gutka pouches of only one MRP - say Rs. X per pouch for which rate of duty prescribed in the notification is Rs. r per month per machine, the duty liability for a particular month shall be- x (n)max, where (n) max is the maximum number of machines installed on any day during the month. Thus, if in a month the maximum number of machines installed on one single day was 10 and on all other days, except for one machine other nine machines were in sealed condition, (n) max for the month will remain 10 only and duty liability for that month shall be determined on that basis. There is no provision for abatement of duty on the machine which were in sealed condition during the month and for this reason were not operational. Though this provision is PMPM rules may appear to be harsh, it has to be borne in mind that the Government notifies items under Section 3A having regard to- (a) Nature of process of manufacture or production of excisable goods of any specified description; (b) extent of evasion of duty in regard to such goods, or (c) Such other factors as may be necessary to safeguard the interests of revenue. PMPM Rules have been framed taki ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
