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TMI Blog2013 (9) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... ew John, JJ. Appellant Rep by: Shri S.K. Pandey, Adv. Respondent Rep by: Shri Sanjay Jain, AR Per: D.N. Panda: In this Misc. application, appellant summarily states as under: (1) That the Bench which heard its stay application on 22.9.2011 should hear the Misc. application. (2) The Bench, on 22.9.2011 ordered to make pre-deposit of Rs. 20.00 (Twenty lakhs only). But when the appellant pleaded its merit, Bench was pleased to direct pre-deposit of Rs. 10.00 lakhs (Ten lakhs only). However, when the order was received by appellant that shows that pre-deposit of Rs. 20.00 lakhs was ordered. (3) The Bench considered direction of Hon'ble High Court of Allahabad in W.P. 8727(M/B) of 2012 disposed on 16.11.2010 as if that was issued to the lower authorities. (4) Plea under Rule 8 of Pan Masala Packing Machines (Capacity Determination and Collector of Duty) Rules, 2008 (hereinafter referred as "2008 Rules") was not taken into consideration by Tribunal although this was direction by Hon'ble High Court to consider independent of clarification issued by Government of India. 2.1 Learned Counsel moving the application on behalf of appellant specific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lahabad ordered that Rule 8 of above Rules deserves consideration independent of clarification issued by Government. The classification of Govt. is contrary to Rule 8 of the aforesaid Rules. 3. Revenue supported the order of adjudication. 4. Heard both sides patiently again for second time. 5.1 We have highest regard to direction of Hon'ble High Court and keeping such direction in mind and mandate of section 3A of Central Excise Act, 1944 (hereinafter referred to as "the Act") an interim modality was worked out by stay order No. 1032/2011 as against duty demand of Rs. 1,25,29,839/- and levy of penalty of equal amount aggregating nearly Rs. 2.50 crores. Against such huge demand order was passed directing the appellant to deposit a reasonable pre-deposit of Rs.20 lakhs which was only 8% of entire demand to hear the appeal appreciating that the matter is of recurring in nature and interpretation of statute involved. Consideration having been made to direct pre-deposit of Rs. 20.00 lakhs in absence of financial difficulties of appellant, there was no scope for impression of pre-deposit order for Rs. 10.00 lakhs. 5.2 Right of appeal being conditioned by pre-deposit under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne capable of being used for packing of different goods of different RSP is deemed under law to be an operational packing machine for each such goods differently in terms of Rule 5 instead being counted as only one machine for all such products packed. No doubt, pan masala is different from Gutkha by its composition and nature. Pan masala and Gutkha are two different goods and may be packed at different points of time even by one machine, if that machine is capable of packing two such different goods. 5.7 Due to fiction of law in Rule 5 of 2008 Rules, prima facie it appears that legislature intended by fiction to take constructive notice of operation of two machines when two different goods are packed even by a single machine and such machines are deemed to have been operated. Legislature have wide latitude in taxation. Enactment of deeming fiction in law is nothing new to the economy. It is a measure to remedy situations for curbing loss/evasion of Revenue. Evasion prone goods are brought to duty by one such measures in law. 5.8 We are conscious that keeping in view the object to Rule 4 5, the deeming provision in Rule 8 of 2008 Rules was enacted. According to proviso to Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicant. 9. There is a demand of excise duty to the tune of Rs. 1,25,29,839/- confirmed against the appellants under the impugned order arising from duty liability assessed for the period Aug 08 to Jan 09 under the Pan Masala Packaging Machines (Capacity Determination and Collection of Duty Rules) 2008 (hereinafter referred to as "the said Rules"). The duty liability under the said Rules are fixed with reference to the number of machines used and the Retail sale price (RSP) of the products manufactured. This demand arises as under: Month No of Machines Installed Goods Manufactured Duty to be paid according to Revenue Duty to paid by the Appellant Duty under dispute Aug 08 1 Pan Masala With RSP Rs.1 per pouch 9,25,000 0 9,25,000 Gutka With RSP 1 per pouch 12,50,000 5,00,000 7,50,000 Sep 08 1 Pan Masala With RSP Rs.1 per pouch 9,25,000 0 9,25,000q Gutka With RSP Rs.1.00 per pouch 12,50,000 6,25,000 6,25,000 Gutka With RSP Rs.0.50 per pouch 12,50,000 0 12,50,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les. The Revenue does not agree with this claim. 10.3 Even if issue-I is decided in favor of the appellant there is short fall in payment of duty to the tune of Rs. 19,79,839/- on account of Issue-II 11. Issue-II appears to have been subject matter of separate proceedings also. The Counsel did not raise any contentions on Issue-II. No submissions are seen in the appeal memorandum either. In the impugned order it is stated in the second para of "Discussion and Findings" that the issue of abatement was once remitted by the Commissioner (Appeal) to the adjudicating authority for issue of speaking order. The Commissioner of Central Excise who adjudicated the Show Cause Notice leading to the present impugned order, involving both the Issues took note of the fact that the Assistant Commissioner had already issued a speaking order in compliance with the order of the Commissioner (Appeal). 12. The argument of the Counsel in the matter of Issue-I is that the proviso to Rule 8 is not consistent with common sense and equity and that the Chief Commissioner of Central Excise in charge of the Zone had written to CBEC pointing out that the provision causes harsh liabilities and is not a jus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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