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TMI Blog2012 (9) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... r containing the required details the main information being the number of single track and multiple track packing machines available in the factory, out of available machines, how many are installed and out of installed machines, how many are intended to be operated for production, the name of manufacturer of each machine, its maximum speed, identification number, the retail sale price of the gutka/pan masala pouches to be manufactured etc. As per Rule 6(6) a manufacturer can add new packing machines or uninstalled one or more installed packing machines or start manufacture of pouches of a new MRP or change any other declared parameters by filing a fresh declaration to Assistant/Deputy Commissioner atleast three day in advance. As per Rule 7, the duty payable for a particular month is to be calculated by applying the appropriate rate, as specified in the notification No. 42/2008-CE dated 1.7.2008 to the number of operating packing machine. Under Rule 8 of PMPM Rules, the number of operating packing machine in a month shall be the maximum number of machines installed on any day during the month and for this purpose, if a manufacture commences manufacturing the pouches of a new reta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1AA of the Act, and (b) Imposed penalty of Rs.25,00,000/- on the Appellant under Rule 17 of PMPM rules while confirming differential duty demand of Rs. One crore, the Commissioner held that during May, 2010 the maximum number of machines installed was eight not nine as alleged in the show cause notice. 1.5. Against the above order of the Commissioner, this appeal has been filed alongwith the stay application. 2. Heard both the sides in respect of the stay application. 3. Shri Pradeep Jain, Advocate, the learned Counsel for the Appellant pleaded, that during each month during the period of dispute, on the request of the Appellant, the officers had sealed certain machines for some particular period, that the machines sealed admittedly had not been operated and, therefore in respect of these machines duty cannot be charged for the period, during the month, for which the machines were sealed; that the Appellant in their letter to the Department had requested for allowing them to deposit, the duty on pro-rata basis and since there was no objection from the Department, they discharged duty liability on pro-rata basis, that each machine, in respect of which duty had not been paid for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etermined by applying the appropriate rate of duty per machine as prescribed in Notification No. 42/2008-CE to the number of operating machines, in the terms of Rule 8, the number of operating machines in a month is the maximum number of packing machines installed on any day during the month and for this purpose, in the case of non-working of an installed machine during a month for any reason whatsoever, the same shall be deemed to be operating packing machines for the month: (d) there is no provision in PMPM rules for payment of duty in respect of an installed machine on pro-rata basis i.e. on the basis of the number of days for which the machine worked during the month; and (e) If the Appellant's plea is accepted, the second proviso to Rule 8 would become redundant. As regards the judgement of the Punjab & Haryana High Court in the case of Godwin Steels (P) Ltd. vs. CCE, Chandigarh (supra) Sh. Baig stated that this judgement is not applicable to the facts of the case as in the case of Godwin Steels the dispute was for the duty demand for the period prior to starting production for the first time as while the assessee in that case, had commenced production in the middle of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or more; (b) during the period of closure there should not be any manufacturing activity whatsoever and no removal of goods by the manufactures and (c) prior intimation at least three days prior to closure must be given to jurisdictional Central Excise Officer who shall seal all the packing machines available in the factory in such a manner that the same cannot be operated during the period of closer. In this case, it is not the case of the Appellant that entire factory was closed for continuous period of 15 days or more during which there was absolutely no manufacturing activity and no removal of the finishing goods. Therefore, abatement under Rule 10 is not available. From a perusal of this rule it is clear that this rule is not applicable when during part of a month some of the installed machines have been sealed and were non-operational, but other machines were being operated. We are, therefore, of prima-facie view that abatement under Rule 10 cannot be given in respect of individual machines which may have been sealed for a continuous period of 15 days or more, when during that period, other machines were functioning. 7. Other than Rule 10, there is no provision for chargi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking into account the ground reality of rampant duty evasion by Gutka and Pan Masala units. 9. In the case of Godwin Steels (P) Ltd. vs. CCE, Chandigarh (supra) cited by learned Counsel for the Appellant, the Appellant had commenced production from middle of the month while the Department wanted duty under Rule 962P(2) for the whole of the month and in these circumstances Hon'ble High Court held that duty can not be charged for the period when the assessee had not even commenced the production. In this case, the dispute is of totally different nature and hence we are of prima-facie view that the ratio of this judgement is not applicable to the facts of this case. 10. Another plea of the Appellant that the same Commissioner in case of M/s Rajat Industries Pvt. Ltd. in similar set of facts has held the payment of duty on pro-rata basis as valid is not acceptable as one wrong decision can not be the basis for another wrong decision. 11. In view of the above discussion, we are of the view that the appellant have not been able to establish prima-facie case in their favour and hence this is not a case for total waiver from the provisions of Section 35F. The Appellant are, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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