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TMI Blog2015 (9) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... d be followed for surrender of registration. Incidentally, by order dt.17.02.2011, the Hon'ble Supreme Court directed that the ban will be effective from 01.03.2011. As per the direction of Hon'ble Supreme Court, the Appellant re-opened the factory on 17.02.2011. The jurisdictional Superintendent of Central Excise, de-sealed the machines. In such a peculiar facts and circumstances of the case, in our considered view, the refund claim filed by the Appellant would come within the purview of Rule 16 of Rules 2008. - impugned order is liable to be set aside. Accordingly, it is set aside - Decided in favour of assessee. - Appeal No. E/13617/2013-DB - Final Order No. A/11210/2015-WZB/AHD - Dated:- 13-8-2015 - P K Das and P M Saleem, J. For The Appellant : Shri S N Kantawala, Adv. For The Respondent : Dr J Nagori, AR Per: P K Das: The relevant facts of the case, in brief, are that the Appellants were engaged in the manufacture of Gutkha and Pan Masala, classifiable under Chapter Heading No.24039990 and 21069020 respectively of the Schedule to Central Excise Tariff Act, 1985. These items were covered under Compounded Levy Scheme as notified goods by Notification No.29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chines. However, as per the direction of Hon'ble Supreme Court, the factory was re-opened on 17.02.2011 and the jurisdictional Central Excise Officers de-sealed the machinery. Thus, there is no manufacturing operation during the closure period from 10.02.2011 to 16.02.2011 and the Appellants are entitled to get the refund of duty as paid by them on pro-rata basis. He drew the attention of the Bench to various provisions of Rules 2008. He also relied upon the various decisions of Hon'ble Supreme Court, High Court and Tribunal. 4. On the other hand, the learned Authorised Representative on behalf of the Revenue reiterates the findings of the Commissioner (Appeals). He submits that there is no provision under Rules 2008 to refund any duty as paid by the Appellant as per the determination of annual production capacity. He further submits that the Appellants themselves stopped the production and the Ministry of Environment Forest had not issued any notification to stop the production of the goods. It is further submitted that the main object of the Rules 2008 is to safeguard the interest of Revenue insofar as the Appellants are liable to pay duty during the period, even the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.2011. Hence, the Appellant re-opened their factory and as per an application on 17.02.2011 of the Appellant, the Superintendent of Central Excise de-sealed the machines. De-sealing of the machines was done at 18.00 hrs on 17.02.2011. Hence, the Appellant filed a refund claim of duty on 29.06.2011 for the period of 6 days as they closed down their factory. 7. According to the Revenue, Rule 10 of Rules 2008 specified the period for qualifying for abatement of duty would be any continuous period of 15 days or more. But, the Appellant's factory was continuously closed only for 6 days i.e. 11.02.2011 to 16.02.2011. The period of 6 days during which the Appellant's factory was closed will not qualify for refund/abatement. Adjudicating authority rejected the refund claim holding that there is no provision, under Rule 2008 for refund/abatement of duty except Rule 10 of the said Rules. It has been observed that the Appellant was neither forced by an order nor by any notification of the Central Excise Department to close down their factory. The machines were sealed and de-sealed only at the request of the Appellant. By the impugned order, the Commissioner (Appeals) upheld the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pprove declaration and determine and pass such order concerning annual capacity of production. Rule 8 of the said Rules provides alteration in number of operating packing machines. Second Proviso to Rule 8 states that in case of non-working of any installed packing machines during the month for any reason whatsoever, the same shall be deemed to be operating packing machines for the month. Duty payable for a particular month, as per Rule 7 of the said Rules, shall be calculated by application of the appropriate rate of duty specified in the notification, to the number of operating packing machines in the factory. 8.2 Rule 9 of Rules 2008 is a machinery provision, manner of payment of duty and interest. The monthly duty shall be paid by the 5th day of the same month and intimation shall be filed to the jurisdictional Superintendent of Central Excise before 10th day of the same month. 4th Proviso to Rule 9 provides that in case a manufacturer permanently discontinues manufacturing of goods of existing retail sale price or commences manufacturing of goods of a new retail sale price during the month, the monthly duty payable shall be re-calculated on pro-rata basis and in case, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply in case, a manufacturer closed down his factory in respect of all the machines installed in the factory. 10. The other aspect is that the use of words operating packing machine in Rules 5, 6(3), 7 and 8 would indicate it that the duty for a particular month shall be payable on the basis of number of packing machines operating in the factory. Second Proviso to Rule 8 stipulates that in case of non-working of any installed packing machine, for any reason whatsoever, the same shall be deemed to be operating packing machine for the month. The benefit under Rule 10 would be extended in case non-working of all operating packing machines for certain period. But, in case a manufacturer cease to work permanently and all the machines were sealed by the Superintendent of Central Excise on the basis of intimation given by them, resulting to none of the packing machines would be operating and the duty if any paid, should be refunded. 11. Hon'ble Supreme Court in the case of Trutuf Safety Glass Industries Ltd Vs Commissioner of Sales Tax - 2007 (215) ELT 14 (SC), held as under:- 18.The question is not what may be supposed and has been intended but what has been said. Statute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty for the period prior to the commencement of production. Therefore, in our view the impugned order confirming demand for first three days of May 2009 when the production had not even commenced cannot be sustained. In our aforesaid view, we find strength from the judgment of Punjab Haryana High Court in the matter of Godwin Steels (P) Ltd wherein while dealing with the similar issue of compounded levy scheme in relation to steel mfg. unit it was held thus:- 3.After hearing the learned counsel for the parties, we are of the considered opinion that as the petitioner's factory started production with effect from 17-11-1997, therefore, it was wholly unjust for the department to recover the duty for the whole month of November, during which, its factory had not commenced production. When the factory of the petitioner was not in production, then obvious, it is not liable to pay the duty during the period of non-production . 13. In the present case, it is revealed from the letter dt.08.02.2011 of the Appellant, as referred above, that the Appellants had given intimation to the Assistant Commissioner of Central Excise that they closed down their factory due to the notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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