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TMI Blog2024 (5) TMI 1330X X X X Extracts X X X X X X X X Extracts X X X X ..... ala Packing Machines (Capacity Determination And Collection of Duty) Rules, 2008 PMPM Rules, with effect from 01.07.2008, the duty liability on Gutkha/Pan Masala is to be discharged on monthly compounding basis and the manufacturers of Gutkha and Pan Masala are statutorily required to self assess the duty liability at the appropriate rate prescribed under Notification No. 42/2008-CE., dated 01.07.2008, on the number of machines installed in the factory and the RSP of pouches manufactured during the month. 2.3 Respondent filed a declaration dated 07.12.2009 in terms of Rule 6 of the said Rules declaring therein the number of machines meant for various RSP, intended to be operative in his factory for production of notified goods as upto Rs.1.00 in respect of Gutkha/Pan Masala, Upto Rs.1.50 in respect of Gutkha/Pan Masala, Upto Rs.2.00 in respect of Gutkha/Pan Masala, Upto Rs.3.00 in respect of Gutkha/Pan Masala and Upto Rs.3.00 in respect of Pan Masala only. 2.4. And whereas, the Responent filed their declarations in Form-I on 21.11:08, 02.12.08, 09.12.08, 26.12.08, 29.12.08, 05.01.09, 27.01.09, 12.02.09, 25.02.09, 24.03.09, 26.03.09, 21.04.09, 27.04.09, 26.05.09, 01.06.09, 29.06.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.3.00/- except Pan Masala of RSP of Rs.2.00/- & Rs.3.00/-. As per the first proviso to Rule 8 of the PMPM Rules, due to production of Pan Masala of different RSPs on the same existing pouch packing machines, it should be deemed to be an addition in the number of operating pouch packing machine for the said period. Therefore, the party was required to discharge their duty liability according to number of machines pertaining to each RSP manufacturing notified goods i.e. Gutkha and Pan Masala separately e.g. in case where they declare one pouch packing machine of RSP of upto Rs.3.00/- (Gutkha/Pan Masala) they were required to discharge the duty liability of Gutkha of Rs.1.00/- Rs.1.50/-, Rs.2.00/-, Rs.3.00/- and Pan Masala of Rs.2.00/- and Rs 3.00/- separately i.e. Rs. 12.5/- Lakhs, Rs.19.00/- Lakhs, Rs.24.00/- Lakhs and Rs.36.00/- Lakhs, Rs. 18.00/- and Rs.26.00/- Lakhs, total liability of duty amounting to Rs. 1,35,50,000/- as per each RSP for the month of December 2008 to July 2009, instead they discharged the duty liability for manufacture of Gutkha of RSP of Rs.3.00/- i.e. Rs.36.00/- Lakhs i.e. the duty has been discharged as per the rate of duty per packing machine per month as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 w.e.f. 13.04.2010 which reads as under:- "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 retail sale price for the whole month" Further, Tribunal has given the sanction of the said amendment in the section 109 regarding charging of duty within the particular slab on highest MRP basis for earlier period also i.e. prior to 13.04.2010. The appeal filed by the Revenue in the above said case was dismissed by the Hon'ble High Court. On a similar issue in the case of M/s Kay Pan Sugandh (P) Ltd. Vs CCE, the Tribunal vide Final Order No. A/52084/2017-EX [DB] dated 03.03.2017 has set aside the Order-In-Original demanding the duty. Accordingly vide impugned Order-In-Original the Adjudicating Authority has dropped the case proceedings initiated vide SCN No. 05/Commr./LKO/2010 dated 08.01.2010 issued under F.No. V(30)Adj/Lko / 256/2009/311-315 dated 08.01.2010 against M/s K. P. Pan Products Pvt. Ltd., C-524, Transport Nagar, Lucknow." 3.1 We have heard Shri Manish Raj, learned Authorised Representative appearing for the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e an addition in the number of operating packing machine for the month. The basic point of dispute in this case is as to what is "the new retail sale price." According to the appellant, a new retail sale price is the retail sale price which belongs to a new RSP slab, i.e., the RSP slab, other than the RSP slab to which existing retail sale price belongs. Thus, according to the appellant if a manufacturer is manufacturing the Gutkha of the RSP of Re. 1/-, the RSP of Re. 0.50 pc. cannot be treated as new RSP, as in terms of Rule 5, the deemed production per operating packing machine per month for RSP up to Re. 1/- is 37,44,000/- and the RSP of Re. 1/- and Re. 0.50/- belong to the same RSP slab. Accordingly, the appellant's contention is that the new retail sale price for invoking first proviso to Rule 8 is that RSP which belongs to a different RSP slab. On the other hand, the department's contention is that the new RSP means a RSP different from the existing RSP, irrespective of whether the existing RSP and the new RSP belong to the same RSP slab mentioned in Rule 5. 6. In terms of Section 3 of the Central Excise Act, 1944, the Central Excise duty is leviable on all the excisable g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Rs. 2/-" its deemed production would be 35,56,800/-. Thus, if a single track machine in a month had manufactured Gutkha pouches of RSP of Re. 0.25, Re. 0.50 piece and Re. 1/-, its deemed production would be 37,44,000/-. Notification No. 42/2008-C.E., dated 1-7-2008 specifies the duty payable per operating machine per month based on the various RSP slabs, as specified in Rule 5. The duty payable specified in the notification is the total duty payable under Section 3 of the Central Excise Act, 1944, Additional Excise duty leviable under Section 85 of the Finance Act, 2005, National Calamity Contingent Duty leviable under Section 136 of the Finance Act, 2001, Education Cess leviable under Section 91 of the Finance Act, 2004 and Secondary and Higher Education Cess leviable under Section 136 of the Finance Act, 2007. In terms of Rule 7 of the PMPM Rules, the duty payable shall be calculated by the application of the appropriate rate of duty specified in the Notification No. 42/2008-C.E., dated 1-7-2008 to the number of operating packing machines in the factory during the month. The Rule 8 of the PMPM Rules states that in case during a particular month there is addition or decrease in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e PMPM Rules, in case it is found that a manufacturer has manufactured goods of the RSPs which have not been declared by him in accordance with the provisions of these Rules, the duty at the rate applicable to the goods of the highest RSP, so manufactured by him shall be payable by him in respect of all the packing machines operated by him for the period during which such manufacturing took place. Thus, in terms of this Rule when the appellant in the declarations filed by them for the months of June, 2009, July, 2009, August, 2009, October, 2009 and November, 2009 had declared the manufacture of Gutkha of RSP of Re. 1/- and if it is held that during each of these months he had also manufactured Gutkha pouches of RSP of 50 piece also on each of these machines, in accordance with this proviso, they will be liable to pay duty on all the machines at the rate applicable for RSP of Re. 1/-, and in this case there is no dispute that the appellant has paid duty at the rate applicable for the RSP of Re. 1/-. Thus in terms of Sixth proviso to Rule 9, there would be no duty liability. The duty liability would have arisen if against the declared RSP of Re. 1/- the appellant had also used the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machine manufacturing Gutkha pouches of RSP of Re. 1, the RSP of Re. 0.50 piece is not a new RSP, for the purpose of First Proviso to Rule 8, it cannot be treated as new RSP." 4.4 This decision of tribunal has been affirmed by Hon'ble Allahabad High Court as reported at [2015 (326) E.L.T. 239 (All.)] observing as follows: "5. Having heard the learned counsel for the appellant, we find that the basic issue for consideration is, as to what is the "new retail sale price". A new retail sale price is the retail sale price which belongs to a new RSP slab as contemplated in Rule 5 of the Rules. The Table under Rule 5 specifies different slabs of retail sale price, i.e., under Serial No. 1 a pan masala or a pan masala with tobacco manufactured having a retail sale price up to Rs. 1, the number of pouches on which Central Excise Duty would be levied would be 37,44,000. The retail sale price has been denied under Rule 2(f) which is extracted below :- (f) "retail sale price" means retail sale price as specified by the Central Government, in Explanation 3 to the opening paragraph in the Notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 42/2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instant case, there is no dispute that the assessee had ever manufactured pan masala with tobacco in pouches above Rs. 1.00, and, therefore, maximum deemed production as specified in Column 3 to the Table in Rule 5 could not exceed the figure indicated thereunder." 4.5 Learned Commissioner has referred to the decision of the Tribunal in the case of M/s Kay Pan Sugandh (P) Ltd. 2017-TIOL-1561-CESTAT-DEL wherein the Tribunal relied on the decision in case of Trimurti Fragrances holding that the said amendment though made from 13.04.2010 but the same is applicable for the period prior to that, i.e. from the date of enforcement of the Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Rules, 2008. Tribunal in this case observed as follows : "5. On careful consideration of the submissions made by both sides and perusal of the record, we find that the demand confirmed by the adjudicating authority is under the provisions of Rule 8, as was applicable during the relevant period. The said Rule provides that if the manufacturer commences manufacturing of the goods of a new retail sale price during the month on an existing machine, it shall be deemed to be an addi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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