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TMI Blog2019 (11) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of the assessee and against the revenue. - Central Excise Appeal No.16 of 2017, 92 of 2017 - - - Dated:- 23-10-2019 - Bharati Sapru And Rohit Ranjan Agarwal JJ. ORDER ROHIT RANJAN AGARWAL, J. 1 . These two appeals filed under Section 35-G of the Central Excise Act, 1944 arise against the order of the Customs, Excise and Service Tax Appellate Tribunal, Allahabad (hereinafter called as CESTAT ), dated 7.6.2016. As the issue in both the appeals are same, hence they are heard and decided together. 2. Appeal No.16 of 2017 was admitted on 23.5.2019 on the following questions of law: (i) Whether the Hon ble CESTAT has erred in not taking the cognizance of the provision of Rule 7 and Rule 9 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty), Rules, 2008 which provides that: Rule 7. Duty payable to be calculated. - The duty payable for a particular month shall be calculated by application of the appropriate rate of duty specified in the notification of the Government of India in the Ministry of Finance (Department o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be discharged unless the differential duty is paid by the 5th day of the following month and in case the amount of duty so recalculated is less than the duty paid for the month, the balance shall be refunded to the manufacturer by the 20th day of the following month: Provided also that in case it is found that a manufacturer has manufactured goods of those retail sale prices, which have not been declared by him in accordance with provisions of these rules or has manufactured goods in contravention of his declaration regarding the plan or details of the part or section of the factory premises intended to be used by him for manufacture of notified goods of different retail sale prices and the number of machines intended to be used by him in each of such part or section, the rate of duty applicable to goods of highest retail sale price so manufactured by him shall be payable in respect of all the packing machines operated by him for the period during which such manufacturing took place: Provided also that in case a manufacturer does not pay the duty payable by the due date, and continues to operate any packing machine, then till th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nth of November, 2012 as under:- the party was required to pay the Central Excise duty on pro-rata basis for total 12 days (from 19.11.2012 to 30.11.2012) on 06 pouch packing machines of MRP ₹ 1.00 that remained operative during the said period, which comes to ₹ 45,60,000/- @ 19.00 lakhs per machine per month and this duty was to be paid by the 5th day of the following month [i.e. 5th December, 2012], as the pouches of MRP ₹ 1.00 was new retail price for the said party. the party was required to pay full duty on 05 machines used for the manufacture of Gutkha of MRP ₹ 2.00, which works out to ₹ 1,80,00,000/- @ ₹ 36.00 lakhs per machine per month and this duty was to be paid by 5th of the same month, as the pouches of MRP ₹ 2.00 was not a new retail price for the party. thus, the total duty liability of the party for the month of November, 2012 works out to ₹ 2,25,60,000/- [₹ 45,60,000/- of Gutkha MRP ₹ 1.00 on 06 machines + ₹ 1,80,00,000/- of Gutkha MRP ₹ 2.00 on 05 machines] as per the provisions of Pan Masala Rules, 2008 but the party paid ₹ 1,17,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of Gutkha of MRP ₹ 2.00 and on 4 machines for manufacture of Gutkha of MRP ₹ 1.50. 6. In the month of September, 2012, assessee intimated the Department that it will stop production/clearance w.e.f. 6.10.2012 and the Department pursuant thereto sealed the machines in the midnight of 5.10.2012. 7. On 5.10.2012, assessee paid central excise duty of ₹ 3,68,000/- for the month of October, 2012 as there were 11 machines installed in the factory 8. Since production was closed for 26 days in the month of October, assessee applied for abatement of ₹ 3,08,64,516/- which was granted by the Assistant Commissioner on 29.11.2012, who allowed the said amount to be adjusted while discharging duty for subsequent month. 9. The assessee on 12.11.2012 informed the Assistant Commissioner intending to start production of Gutkha of MRP ₹ 1.00 on 6 machines and Gutkha of MRP ₹ 2.00 on 5 pouches packing machine from 19.11.2012. On 16.11.2013, the Assistant Commissioner directed Superintendent, Central Excise to unseal and install the 11 machines in the midnight of 18.11.2012. The assessee started man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding it to be bad and against the provisions of Section 3-A of the Act read with Rules, 7, 8, 9 and 10 of the PMPM Rules, 2008. Similarly, on 10.8.2016 the other appeal of the assessee was also allowed and the order of the Commissioner Central Excise and Service Tax was set aside. 13. Sri Parv Agarwal, learned counsel appearing for the Department, submitted that assessee on 12.11.2012 had submitted a letter declaring that w.e.f. 19.11.2012 the assessee is going to start production of notified goods, i.e., Gutkha of MRP ₹ 1.00 with the aid of 6 pouches packing machine and Gutkha of MRP ₹ 2.00 with the aid of 5 pouches of packing machine. It is submitted that assessee is neither a new manufacturer nor has changed the retail price of 5 machines, which were used for manufacture of Gutkha of MRP ₹ 2.00 during the month of November, 2012. Thus, as per proviso 4 of Rule 9 of the PMPM Rules, 2008 applicable for computation of excise duty is liable for the relevant month. He further submitted that the assessee was required to pay excise duty on pro-rata basis for 12 days on 6 pouches packing machines of MRP ₹ 1.00 that remained operative during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12 and again by letter dated 12.11.2012 regarding starting of production from 19.11.2012. 18. Sri Mishra submitted that intimation as required under Rule 10 was given by the assessee. Thus, he was entitled to abatement in terms of Rule 10 of the PMPM Rules, 2008 in respect of Gutkha of MRP ₹ 2.00. He further submitted that provision to Rule 9 cannot be interpreted in a manner so as to levy duty in circumstances, specifically barred by the parent statute, i.e., proviso to Section 3A of the Act. 19. Sri Nishant Mishra, relied upon a judgment of the Gujrat High Court in the case of Commissioner vs. Thakkar tobacco Products Pvt. Ltd. 2016 (332)E.L.T. 785 (Gujarat) wherein the same issued was under consideration and was decided in favour of the assessee. Relevant paragraph nos.12, 13, 14 and 15 of the said judgment are extracted hereunder:- 12. In the above backdrop, the merits of the impugned order may be examined. The Tribunal, in the impugned order, has recorded that in none of the orders impugned before it, it is in dispute that there was a closure of the factory for more than fifteen days and the required procedure of due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as referred to hereinabove. Once such conditions are satisfied, the assessee becomes entitled to abatement of duty to the extent of the days the factory did not produce the notified goods. 14. On a plain reading of rule 10 of the PMPM Rules, it is apparent that while the same provides that duty calculated on a proportionate basis shall be abated, it does not provide for any procedure for doing so. Thus, whereas rules 96ZQ, 96ZO and 96ZP of the Central Excise Rules, 1944, which also are schemes under the compounded levy scheme, there were express provisions for making an order of abatement by the Commissioner, rule 10 of the PMPM Rules is wholly silent in that regard. Under the circumstances, having regard to the fact that rules 96ZQ, 96ZP and 96ZO provided for making an order of abatement, however, there is no corresponding provision in the PMPM Rules, it can be inferred that the rule making authority has consciously omitted making such provision. Therefore, in the absence of any specific provision for making an order of abatement, it cannot be said that the action of the assessee in calculating the duty on a proportionate basis and setting off the same against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise Act, 1944 and the PMPM Rules abatement is to be granted and the statute does not prescribe any order of abatement to be passed by the any authority such as DC/AC. b) In the erstwhile Central Excise Rules, 1944, there was an express provision which provides for claim of abatement would be allowed by an order passed by the Commissioner of Central Excise. When the intention of the government is that amount is to be refunded in as specific manner, then an express provision is provided. However the impugned rule does not make any such provision. c) The Board Instruction from F.No.267/16/2009-CX-8 dated 12.03.2009 is not applicable in the present case as Rule of PMPM rules does not speak of any order of abatement. 21. We have heard learned counsel for the parties and perused the materials on record. 22. The sole issue under consideration is as to giving benefit of abatement for non-production, whether the assessee could on their own calculate excise duty and set off the same against the duty payable in the next month. The argument of the Department relying upon Rule 9 of the PMPM Rules, 2008 claiming that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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