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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 ..... IGH COURT] it is held that ' in terms of this retrospective amendment effective from 13th April, 2010 made by Section 101 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 amendment is in accordance with the 6th proviso to Rule 9 and is 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 in such a situation at the rate applicable to the highest RSP. ' Learned Commissioner has referred to the decision of the Tribunal in the case of M/S. KAY PAN SUNGANDH (P) LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIPUR [ 2017 (4) TMI 982 - CESTAT NEW DELHI] wherein the Tribunal relied on the decision in case of Trimurti Fragrances holding that the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, 29.06.09 (Annexure- A), whenever, they made any changes in their ground plan or any pouch packing machine was sealed/uninstalled or unsealed/installed. As per the directions of the Dy./Asstt. Commissioner, Central Excise Division-l, Lucknow their pouch packing machines were sealed/uninstalled and unsealed/installed from time to time. In their various Form-1, they declare the no. of unsealed/installed pouch packing machines and in the column of MRP declared as upto Rs.1.00 (Gutkha/Pan Masala), upto Rs.1.50 (Gutkha/Pan Masala), upto Rs.2.00 (Gutkha/Pan Masala), lupto Rs.3.00 (Gutkha/Pan Masala) and Rs.3.00 (Pan Masala). 2.5. And wherea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 applicable only at the highest RSP as prescribed under Notification No.42/2008-Central Excise dated 01.07.2008, as submitted in Form-2 for the month of December 2008 to July 2009. The Revenue has alleged that there is short payment of duty for the month of December 2008 to July 2009 as calculated by them in the Annexure-D to the instant show cause notice and the demand of duty has been made according to duty applicable under Notification No.42/2008-Central Excise dated 01.07.2008 on each RSP leviable on each packing machine as declared in Form-1 filed under Rule 6 of the PMPM Rules, manufacturing the notified goods. 2.7 SCN demanded Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 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 appellant-revenue. Nobody appeared for the respondent. Rule 21 of CESTAT Procedure Rules, 1982 is reproduced bellow:- RULE 21. Hearing of appeals ex parte. Where on the day fixed for the hearing of the appeal or on any other day to which the hearing is adjourned the appellant appears and the respondent does not appear when the appeal is called on for hearing, the Tribunal may hear and decide the appeal ex parte. In terms of the above rule, this appeal has been taken up for consideration ex-parte. 3.2 Arguing for the appellant-revenue, learned Authorized Revenue reiterates the grounds stated in the appeal memo. 4.1 We have considered the impugned orders along w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 goods excluding the goods produced or manufactured in a special economic zone, which are produced or manufactured in India and at the rates specified in first schedule to the Central Excise Tariff Act. However, under Section 3A(1) of the Act the Central Govt. has power to notify certain goods, having regard to the nature of the process of their manufacture or production, the extent of evasion of duty in respect of such goods and the necessity to safeguard the 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 prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the number of operating packing machines the maximum number of packing machines installed on any day during the month shall be treated as the number of operating packing machines during the month. However, the first proviso to Rule 8 states that in case a manufacturer commences his manufacturing of a new RSP during the month on an existing machine, it shall be deemed to be an addition in the number of operating packing machine for the month. The question as to what is a new retail sale 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red 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 machines for manufacture of the Gutkha pouches of RSP of Rs. 3/-, but this is not the case here. 10. It is also seen that by Section 101 of the Finance Act, 2014, the First Proviso to Rule 8 of the PMPM Rules has been replaced w.e.f. 13th April, 2010 by the following :- 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. 10.1 Thus, in terms of this retrospective amendment effective from 13th April, 2010 made by Section 101 of the Finance Act, 2014, when a manufacturer in a particular month manufacturer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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-C.E., dated 1st July, 2008; 6. A perusal of Rule 2(f) indicates that the retail sale price would be as specified by the Central Government in Explanation 3 to the opening paragraph of the Notification of the Government of India dated 1st July, 2008. The 1st paragraph of the Central Government Notification dated 1st July, 2008 is nothing else but a reproduction of the Table specified in Rule 5. Explanation 3 given in paragraph 1 of the Notification dated 1 July, 2008 is, however, extracted below :- Explanation 3. - For the purposes of this notification, retail sale price means the maximum price at which the specified goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 addition in the number of operating packing machine for the month. We find that with the retrospective amendment in the Finance Act, 2014, the said proviso is amended to read as 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. In the case in hand, it is not disputed that in mid of September 2008, under intimation to the department, the appellant had manufactured gutkha pouches with RSP Rs. 1.00 on the 12 machines which they were using for manufacture of gutkha with RSP Rs. 1.50. It is also not in dispute that they have discharged the duty liability ..... X X X X Extracts X X X X X X X X Extracts X X X X
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