9911796707
TMI Blog2015 (3) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Excise Act, 1944. The dispute in this case is for the months of June 2009, July 2009, August 2009, October 2009 and November 2009. The appellant in respect of these months, in terms of the declaration filed by them in form-I under Rule 6 of the PMPM Rules had operated 49 machines, 47 machines, 47 machines, 61 machines and 51 machines respectively, all for manufacture of the Gutkha at MRP of Rs. One per Pouch. However, on scrutiny of their returns, it was found that during these months they had also manufactured cleared the Gutkha of MRP of 50 Paisa per pouch also and during each of these months, they had paid duty on the Gutkha pouches cleared by them at the per month per machines rate applicable for the MRP of Rs. One. 1.2. Rule 8 of the PMPM Rules provides that:- (a) In case of addition or installation or removal or un-installation of a packing machine in the factory during a month, the number of operating packing machines for the month shall be taken as the maximum number of packing machines installed on any day during the month; and (b) In a case where manufacturer commences manufacturing of the goods of a new RSP during month on an existing machine, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Rule 25 of the Central Excise Rules 2002. Against this order of the Commissioner this appeal has been filed. 2. Heard both the sides. 3. Ms. Seema Jain, Advocate, the ld. Counsel for the appellant made the following submissions:- (1) Out of duty demand of Rs. 31,87,50,000/-, the duty demand of Rs. 6,37,50,000/- is for the Month of November, 2009. This duty demand is not sustainable as during the month of November, 2009, the appellant company did not manufacture any Gutkha pouches of the RSP of 50 Paise and during this month only the stock of 50 paise. Gutkha pouches manufactured during previous months were cleared. Therefore, proviso to Rule 8 of PMPM Rules would not be applicable for November, 2009 as this proviso applies only for manufacture and not for in respect of clearance. (2) During June, 2009, July, 2009, August, 2009 and October, 2009, the appellant manufactured Gutkha of RSP of 50 Paise per pouch which had not been declared by them in their declarations for these months. In this situation, Sixth Proviso to Rule 9 of PMPM Rules would apply and accordingly, the appellant company would have to pay duty at the rate applicable to the goods of the higher R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty is not imposable, as penalty under Rule 17 of PMPM Rules is subject to the provisions of section 11AC of the Central Excise Act and therefore, the element of mensrea is mandatory. The appellant had no intention to evade the duty as there was no suppression of any fact from the department and the demand show cause notice has been issued on the basis of the declarations made in E.R.- 1 Returns filed by the appellant. 4. Shri Pramod Kumar, the ld JCDR, defended the impugned order by reiterating the findings of the Commissioner and pleaded that if during a particular month, the Gutkha of pouches of a new RSP are manufactured, this has to be treated as an addition of the machine in terms of 1st provision to Rule 8 of PMPM Rules and that this proviso would be applicable, even if, the new RSP is of the same RSP slab. He, therefore, pleaded that there is no infirmity in the impugned order. 5. We have considered the submissions from both the sides and perused the records. The appellant during the month of June 2009 July 2009 August, 2009 October, 2009 and November, 2009 had as per the declarations filed by them in respect of these months under Rule 6 of the PMPM Rules had operated 49 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interests of the Revenue for levy and collection of excise duty on such goods based on the annual capacity of production of the factory in which such goods are manufactured which shall be deemed to be the annual production of such goods by such factory or based on the quantity which is deemed to have been produced based on a relevant factor as specified by the Govt. In exercise of powers under section 3 A (1) of Central Excise Act, 1944 the Central Government has notified the pan masala and also pan masala containing tobacco (Gutkha) packed in retail packs for levy of duty under section 3A and, accordingly, under Notification No.30/08-CE (NT) dated 01.07.08 has framed PMPM Rules. Rule 4 of the PMPM Rules states that the relevant factor to the production of the notified goods shall be the packing machines in the factory of the manufacture. Rule 5 of the PMPM Rules specifies the deemed production of pouches per operating machines per month for different retail sale prices. The deemed production per operating machines per month specified in Rule 5 is in respect of different RSP slabs upto Rs. 1, from Rs. 1.01 to Rs. 1.50, from Rs. 1.51 to Rs. 2, from Rs. 2.01 to Rs. 3, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le price. 8.1 In our view the expression new retail sale price has to be understood in the sense in which it is understood in Rule 5. Rule 5 of the PMPM Rules, as explained above, specifies the deemed production per operating machine per month and this deemed production is specified for different RSP slabs. The rate of duty per machine per month specified in Notification No.42/2008-CE is on this deemed production only. Therefore, first proviso to Rue 8 cannot be interpreted so as to result in levy of duty on deemed production which is more than the deemed production as specified in Rue 5. In terms of Rule 5 so long as a particular single track packing machine in a particular month manufactures Gutkha pouches of RSP upto Rs. 1 its deemed production would be 37,44,000/-. Thus, even if the machine manufactures in a month the Gutkha pouches of the 25 Paisa, 50 Paisa, 75 Paisa and Rs. 1, its deemed production would be Rs. 37,47,000/- and not Rs. 37,44,000/- multiplied by 4. Thus, for the purpose of Rule 5 all the RSPs within a particular RSP slab are the same for the purpose of determining deemed production per month, and it is only an RSP which is different from a particular RSP sl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1. Thus, in terms of this retrospective amendment effective from 13th April, 2010, made by section101 of the Finance Act, 2014, when a manufacturer in a particular month manufacturers Gutkha of different RSPs on the same machines, his duty liability in respect of that machine would be at the rate applicable to the highest RSP. In our view, this retrospective amendemnt is in accordance with the 6th proviso to Rule 9 and also in accordance with the provisions of Rule 5 and this retrospective amendment to Rule 8 of PMPM Rules, shows that it was not the intention of the Government that in a case where in a month a particular machine is used to produce Gutkha pouches of more than one RSP, each RSP is to be treated as separate machine for the purpose of charging duty, but the intention was to charge duty inasmuch as situation at the rate applicable to the highest RSP. For this reason also, there is no reason for interpreting the first proviso to Rule 8 during the period prior to 13.04.2010 in a manner which would result in levy of duty on the quantity which is more than the deemed production per machine per month as specified in rule 5 as the retrospective amendment to Rule 8 of the PMP ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
