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TMI Blog2013 (9) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... duty rates had been enhanced vide Notification No. 42/2008-C.E. Two notifications were so inconsistent with or repugnant to each other that both cannot be stand together and such repugnancy arises from different criteria for charging excise duty - If both the Notifications were allowed to operate simultaneously this will obviously create an anomaly for the reason that it would discriminate between two sets of manufacturers of pan masala and gutkha, one who earlier to issue of the Notification No. 42/2008-C.E. were operating under Notification No. 38/2007-C.E. and others who were operating under normal scheme of payment of excise duty under Section 3 of the Excise Act. Assesses were operating under Notification No. 38/2007-C.E. issued under Rule 15 of Central Excise Rules, 2002 - The Notification provided for optional compounded levy scheme in respect of specified excisable goods i.e. pan masala and pan masala containing tobacco (gutkha) which provided prescribed rates of duty per pan masala/gutkha packing machine per month - Despite of issue of above referred Notification No. 29/2008-C.E. (N.T.) and Notification No. 52/2008-C.E., earlier Notification No. 38/2008-C.E. under wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 3A of the Excise Act. 6. On 1-7-2008 another Notification No. 30/2008-C.E. (N.T.) was issued providing for Pan Masala Packing Machine (Capacity Determination and Collection of Duty) Rules, 2008 effective from 1-7-2008. These rules were made applicable to all manufacturers of pan masala and pan masala containing tobacco. Rules provided for quantity deemed to be produced by machine depending upon retail price of pouches produced by such machine. Rule 6 of the above referred Rules provided that manufacturer of notified goods shall file a declaration not later than 10 days gives information about number of packing machine installed etc. for determining of capacity of respective machines. The concerned jurisdictional Assistant Commissioner and Deputy Commissioner were required to determine the production capacity of the manufacturer based upon the number of machines and on the basis of the capacity so determined manufacturer/assessee was required to pay duty under compounded levy scheme in accordance with Notification No. 42/2008-C.E., dated 1-7-2008. This notification provided for rate of duty per packing machine per month and was issued under Section 3A of the Central Excise A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner (Appeals) vide separate impugned orders and respective demands were dropped. 12. Show cause notice issued to M/s. Ashok Company Pan Bahar Ltd. (respondent in Appeal No. E/2909/2009) was adjudicated by the jurisdictional adjudication Commissioner who confirmed the demand of Rs. 40 lakhs being differential duty against the said respondent along with interest. Appeal preferred by M/s. Ashok Company Pan Bahar Ltd. against the orders-in-original was allowed vide impugned order by the Commissioner (Appeals) and duty demand against him along with interest was set aside. 13. M/s. Sarin and Sarin and M/s. Som Products being aggrieved of confirmation of duty demand against them and the Revenue being aggrieved of setting aside of the duty demand against the respondents M/s. Ashok Company Pan Bahar Ltd. and M/s. Ashok Fragrancs Pvt. Ltd. have have preferred above noted appeals against the respective impugned orders-in-appeal. 14. Shri V. Lakshmikumaran, Advocate, ld. Counsel for the appellant M/s. Sarin and Sarin and Ms. Seema Jain, Advocate, ld. counsel for the appellant M/s. Som Products respondents M/s. Ashok Company Pan Bahar Ltd. and M/s. Ashok Fragrances Pvt. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the period in dispute i.e. from 1st July to 15th July, 2008. 17. The question posed by the appeals relates to the interpretation of statute. As per accepted principles of interpretation of statute normally there is presumption against repeal of earlier statute by implication. The reason behind this Rule is based on the theory that the legislation while enacting a law has complete knowledge of existing laws on the subject matter and therefore, when it does not provide of repealing provisions which gives out of intention of not to repeal the existing legislation. This presumption however is not absolute. The presumption however can be rebutted if the intention to repeal can be safely inferred from the later statute or the provisions of later statute are so inconsistent with or repugnant of the provisions of the earlier Act that the two cannot stand together. 18. Now in the light of the above referred principles of interpretation of statute we proceed to have look on the relevant Notifications which are reproduced thus : Notification No. 38/2007-C.E., dated 19-12-2007 Pan masala and Gutkha Option to pay Excise duty under special procedure on basis of No. of packing machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the jurisdictional Assistant Commissioner or Deputy Commissioner of Central Excise, as the case may be, and the said Assistant Commissioner or Deputy Commissioner may grant permission for the period in respect of which the application has been made : Provided that if the said permission is not granted or rejected within next two working days of receipt of application, the permission shall be deemed to have been granted. (ii) The manufacturer opting for the special procedure for the first time shall make the application so as to cover the period up to the end of the financial year in which the application has been made, thereafter, the option to avail the said procedure shall be exercised before the start of the financial year and such option, once exercised, shall not be withdrawn during the remaining part of the financial year. 2. Manner of calculation and discharge of duty liability on payment of certain sum. - (i) The manufacturer to whom permission has been granted under paragraph 1 shall pay a sum calculated at the rate specified in this notification, subject to the conditions herein laid down, and such payment shall be in full discharge of his liability for duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. - In case a manufacturer who has been granted permission under paragraph 1 does not pay the sum payable as referred to in sub-paragraph (iii) of paragraph 2, and continues to operate any packing machine, he shall be liable to pay the said sum for the remaining months of the financial year based on number of packing machines declared in the month for which duty was last paid by him or number of packing machines found installed in his premises during the said period, whichever is higher and during the period of default, the specified goods manufactured by the said manufacturer shall be liable for confiscation and consequences and penalties as provided in the Central Excise Rules, 2002 shall follow. 4. Addition or removal of packing machine. - In case a manufacturer wants to add or remove a packing machine from his premises, the same shall be permitted under the physical supervision of a Central Excise officer, authorised for the purpose : Provided that in case of removal of the said packing machine out of the factory premises, the same shall be sealed by the Central Excise officer : Provided further that in case it is not feasible to remove the packing machine which is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) pan masala falling under tariff item 2106 90 20 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) except the pan masala containing not more than 15% betel nut; and (ii) pan masala containing tobacco, commonly known as gutkha, falling under tariff item 2403 99 90 of the said Tariff Act (hereinafter referred to as specified goods), manufactured with the aid of packing machine and packed in pouches having retail sale prices as specified in column (2) of Table-1 below, the rates of duty specified in the corresponding entry in column (3) or column (4) of the said Table, as the case may be : TABLE I S. No. Retail sale price (per pouch) Rate of duty per packing machine per month (Rs. in lakh) Pan masala Pan masala containing tobacco (1) (2) (3) (4) 1. Up to Rs. 1.00 9.25 12.50 2. From Rs. 1.01 to Rs. 1.50 14 19 3. From Rs. 1.51 to Rs. 2.00 18 24 4. From Rs. 2.01 to Rs. 3.00 26 36 5. From Rs. 3.01 to Rs. 4.00 34 47 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mined in terms of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008. 3. The duty levied and collected on such specified goods shall be the aggregate of the duty leviable under the Central Excise Act, 1944 (1 of 1944), the additional duty of excise leviable under section 85 of the Finance Act, 2005 (18 of 2005), the National Calamity Contingent Duty leviable under Section 136 of the Finance Act, 2001 (14 of 2001), Education Cess leviable under Section 91 of the Finance Act, 2004 (23 of 2004) and Secondary and Higher Education Cess leviable under Section 136 of the Finance Act, 2007 (22 of 2007) and shall be apportioned in the ratios specified in the Table-2 below. S. No. Duty Duty ratio for pan masala Duty ratio for pan masala containing tobacco (1) (2) (3) (4) 1 The duty leviable under the Central Excise Act, 1944 0.3161 0.7355 2 The additional duty of excise leviable under section 85 of the Finance Act, 2005 0.1355 0.0883 3 National Calamity Contingent Duty leviable under section 136 of the Finance Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 42/2008-C.E., dated 1-7-2008, Notification No. 38/2007-C.E. automatically got superseded. Further if we compare the Notifications we find that Notification No. 38/2007-C.E. provided for optional scheme whereas the Notification No. 42/2008-C.E. has introduced compulsory compounded levy scheme applicable to all the manufacturers of pan masala and gutkha pouches of specific category. Excise tax structure provided in these notifications is different. Therefore, in our view the above referred two notifications are so inconsistent with or repugnant to each other that both cannot be stand together and such repugnancy arises from different criteria for charging excise duty. If both the Notifications are allowed to operate simultaneously this will obviously create an anomaly for the reason that it would discriminate between two sets of manufacturers of pan masala and gutkha, one who earlier to issue of the Notification No. 42/2008-C.E. were operating under Notification No. 38/2007-C.E. and others who were operating under normal scheme of payment of excise duty under Section 3 of the Excise Act. In view of the above noted repugnancy between the Notifications we find that Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tailed in Notification No. 38/2007-C.E. provides that in case of revision in the rate of excise duty the same shall be recalculated on the basis of revised rates from the date of revision and the liability of duty leviable on the manufacturer of the specified goods from that date shall not be discharged unless differential duty is paid and in case the amount of duty so recalculated is less than the sum paid then the differential amount shall be refunded to the manufacturer. Obviously, the excise duty rates have been enhanced vide Notification No. 42/2008-C.E. as such, in view of above noted condition of Notification No. 38/2007-C.E. the assessee-appellant-respondent are liable to pay differential of excise duty based upon different rates in excise duty on account of enhancement of rate of excise duty. 22. The next contention on behalf of the assessee (appellant/respondents) is that undisputedly, the assessee had discharged their duty liability for the month of July, 2008 in June, 2008 and as such by bringing the subsequent notification No. 42/2008-C.E., the Revenue cannot demand differential excise duty from the appellant. In support of this contention the respective assessees (a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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