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TMI Blog2023 (4) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... ale price during the month. In such case, monthly duty payable shall be re-calculated pro-rata on the basis of total number of days in that month and the number of days remaining in that month counting from the date of such discontinuation or commencement and the duty liability for the month shall not be discharged. The entire case of the department is that since the appellant have changed the retail sale price twice i.e. one in January, 2012 and second in April, 2012, the appellant has not permanently discontinued the manufacturing of goods of existing retail sale price. As per the Adjudicating Authority, only when the retail sale price is changed permanently, the appellant can be eligible for pro-rata duty on the reduced retail sale price whereas in the present case, since the retail sale price was reintroduced, the change in retail sale price was not permanently made. Hence, the 4th proviso to Rule 9 is not applicable in the appellant s case. From the careful reading of above 4th proviso to Rule 9 of Pan Masala Packing Machine Rules, it is observed that the term permanently discontinues or commences is in respect of a particular month wherein the new retail sale pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Rule 9 of PMPM Rules was scrupulously complied with by the appellant - there is no doubt that the term permanently discontinuation or commencement of retail sale price must be considered in a particular month and not otherwise - the terms permanently in the 4th proviso to Rule 9 was not violated by the appellant. Third proviso to Rule 9 provides that a manufacturer permanently discontinue manufacturing of goods of existing retail sale price or commence manufacturing of goods of new retail sale price during the month. The appellant had discontinued retail sale price Rs. 1.50 since January 2012 which has been accepted by the Revenue for the month of February and March 2012 therefore, findings of the Revenue that no intimation for discontinuation permanently is factually incorrect - the double standard of the same authority cannot be accepted. It is also noted that the appellant permanently discontinued retail sale price Rs. 2 with effect from 08.04.2012 thereafter they did not manufacture the notified goods having retail sale price Rs. 2.00 in the same month which demonstrates that the appellant permanently discontinued the retail sale price Rs. 2.00. Therefore, the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey would discontinue to manufacture pan masala having RSP of Rs. 1.50 along with the letter, the appellant submitted the declaration in prescribed Form-1 in terms of Rule 6 of the said Pan Masala Rules. The appellant accordingly paid Central Excise duty on pro-rata basis as per number of days the pouch packing machines operated for manufacture of particular RSP in terms of third proviso to Rule 9 of the said Pan Masala Rules. Due to market recession and having cut-throat competition in the market, the appellant has discontinued existing retail sale price of Rs. 2.00 permanently and restored sales price of Rs. 1.50 with effect from 08.04.2012. Accordingly, the appellant in advance intimated to the Assistant Commissioner having jurisdiction over his factory for change of retail sales price as per Rule 6 (6) of the said Pan Masala Rules. The appellant was issued show cause notice and called upon to show cause to as to why Central Excise duty should not be demanded and recovered under Section 11A of the Central Excise Act, 1944 read with Rule 9 of Pan Masala Rules along with interest and penalty. It was alleged that the appellant did not permanently discontinue RSP for manufacture of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture the goods of retail sale price of Rs. 1.00 since February 2011 to December 2011. The appellant discontinued retail sale price Rs. 1.00 permanently in the month of March 2011 and therefore, they did not manufacture goods of Rs. 1.00 during interregnum period. The appellant re-introduced retail sale price Rs. 1.00 to capture the market and compete with competitors. 2.1. It is his submission that appellant permanently discontinued manufacturing of goods of retail sale price of Rs. 1.00, the officers did not raise any issue and permit to manufacture notified goods of new introduced price of Rs. 1.50 hence, finding of the Revenue is that the appellant manufactured the notified goods of retail sale price of Rs. 1.00 in past prior to February 2011 and therefore, benefit of pro-rata duty to the extent of use of operating machines in a month is not permissible, is miscarriage of justice. He submits that it is appreciated that appellant filed declaration in prescribed Form No.1 under Rule 6 on 02.01.2012 showing their intention. While accepting the declaration, the Revenue extended the benefit of pro-rata duty for manufacture of notified goods of having retail sale price Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inue manufacture of notified goods with existing retail sale price for payment of duty on pro-rata basis. Since the appellant discontinued retail sale price of Rs. 1.50 since January 2012 which have been accepted by the Revenue for the month of February 2012 and March 2012, finding of the respondent that there was no intention on the part of the appellant to discontinue permanently is factually incorrect. 2.3 As regards the retail sale price of Rs. 2.00 for manufacture of the notified goods through one operating machine, he submits that Revenue accepted the declaration filed on 02.01.2012 for allowing payment of duty on pro-rata basis based on the days of which the operating machines used for manufacture of notified goods. However, the said benefit was not extended in the month of April 2012 when the appellant decided to discontinue retail sale price of Rs. 2.00 for manufacture of notified goods permanently. He submits that due to cut-throat competition and non acceptance of higher price by the customers, the appellant permanently discontinued retail sale price Rs. 2.00 with effect from 08.04.2012. The appellant thereafter did not manufacture the notified goods having retail sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collection of duty) Rules 2008. The Rule 9 is reproduced below:- Rule 9. Manner of payment of duty and interest . The monthly duty payable on notified goods shall be paid by the 5th day of the same month and an intimation in form 2 shall be filed with the jurisdictional superintendent of central excise before the 10th day of the same month: Provided that monthly duty payable for the month of July, 2008 shall be paid on or before 15th day of July, 2008 : Provided further that if the manufacturer falls to pay the amount of duty by due date he shall be liable to pay the outstanding amount along with the interest at the rate specified by the central government vide notification under [section 11AA] of the Act on the outstanding amount, for the period starting with the first day after due date fill the date of actual payment of the outstanding amount: Provided also that in case of increase in the number of operating picking machines in the factory during the month on account of addition or installation of packing machines, the differential duty amount, if any, shall be paid by the 5th day of the following month: Provided also that in case a manufacturer permanently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable in his premises at any time thereafter, whichever is higher: Provided also that in case a new manufacturer commences production of notified goods in a particular month, his monthly duty payable for that month shall be calculated pro-rata on the basis of the total number of days in the month and the number of days remaining in that month starting from the date of commencement of the production of such notified goods and shall be paid within five days of such commencement.] From 4th proviso to Rule 9, the manufacturer is allowed to permanently discontinue the goods of existing retail sale price or commence a new retail sale price during the month. In such case, monthly duty payable shall be re-calculated pro-rata on the basis of total number of days in that month and the number of days remaining in that month counting from the date of such discontinuation or commencement and the duty liability for the month shall not be discharged. As per the facts of the present case, the appellant filed letter dated 10.01.2012 and submitted intimation of duty payment in prescribed Form-2 for the month of January 2012 as required under Rule 9 of the said Rules and submitted duty calcu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturing 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 recalculated pro-rata on the basis of the total number of days in that month and the number of days remaining in that month counting from the date of such discontinuation or commencement and the duty liability for the month shall not 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: From the careful reading of above 4th proviso to Rule 9 of Pan Masala Packing Machine Rules, it is observed that the term permanently discontinues or commences is in respect of a particular month wherein the new retail sale price is discontinued or commenced, from which it is clearly inferred that the term permanently does not mean that the discontinuation or commencement of new retail sale price should be once forever. It is clear that the discontinuation or commencement of new retail sale price should be o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012 should have been demanded. This itself establish that permanent discontinuation or commencement of one retail sale price means permanent in a particular month, hence the same was not violated in the present case for the reason that in the month of January, 2012 or April, 2012 the retail sale price was changed only once in the respective month, hence the said change was permanent in that particular month. Accordingly, the condition of 4th proviso to Rule 9 of PMPM Rules was scrupulously complied with by the appellant. 7. Our above observation gets further reinforced with the amended first proviso to Rule 8 of PMPM Rules, 2008 which is reproduced below:- Provided that where a manufacturer uses an operating machine to produce pouches of different retail sale prices during a month, he shall be liable to pay the duty applicable to the pouch bearing the highest retail sale price for the whole month. From the reading of the above proviso, it can be seen that if in a month different retail price are used on operating machine, in such case the appellant is liable to pay duty applicable to the pouches of the highest retail sale price for the whole month. This also suggest th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the finished goods was very much recorded in the records of the appellant and the same was neither altered nor manipulated. The Revenue has not disputed the correctness of the stock in the appellant s factory which was recorded in the records. Due to this procedural lapse, the benefit of pro-rata based duty in terms of 4th proviso read with 3rd proviso, cannot be denied. 10. As regards alternate submission made by the appellant that at the most the duty could have been demanded on the basis of highest retail sale price for the entire month, as per Section 101 of Finance Act, 2014. The first proviso to Rule 8 of the Pan Masala Packing Machine Rules has been replaced with effect from 13 April 2010. The said proviso is reproduced below:- Provided that where a manufacturer uses an operating machine to produce pouches of different retail sale price during a month, he shall be liable to pay the duty applicable to the pouches of the highest the retail sale price for the whole month. We find force in the submission of the appellant that in view of the above replaced proviso, the calculation of duty made by the Adjudicating Authority is prima-facie incorrect and at the most d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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