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TMI Blog2024 (8) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal and held that there is no need to first pay the duty and thereafter claim the abatement. This Tribunal considering Rule10 of the Pan Masala Packaging Machine (Capacity Determination and Collection of Duty) Rules, 2008 held that the claiming the abatement without paying the duty for the period when the machine was under closure is in order, therefore, on this account the demand is not sustainable. In the case of P.M. PRODUCTS VERSUS COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD-II [ 2023 (9) TMI 1370 - CESTAT AHMEDABAD] Division Bench of this Tribunal on the identical issue has held that 'In the present case, the appellant is eligible for abatement in principle and under no circumstances the full duty can be demanded for the period of abatement when the machine was not in operation.' The issue is no longer res-integra and the appellant are entitled for the abatement even without first payment of the duty for the period of closure of machine. Therefore, the demand of duty in the present case is not sustainable - the impugned Orders are set aside - Appeal allowed. - HON'BLE MEMBER ( JUDICIAL ) , MR. RAMESH NAIR And HON'BLE MEMBER ( TECHNICAL ) , MR. C L MAHAR Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the findings of the impugned order. 4. We have carefully considered the submission made by both the sides and perused the records. We find that from the record it is not in dispute that the appellant have scrupulously followed the procedure for sealing and desealing of the machines under the supervision of the departmental officer and claim the abatement only for the period when the machine was under closure. The only contention of the department is that the appellant should have first paid the excise duty for the entire period and thereafter, they should have claimed the abatement in respect of the proportionate duty attributed to the period when the machine was under closure. This very issue has been considered time and again in various decisions by this Tribunal and held that there is no need to first pay the duty and thereafter claim the abatement. This Tribunal considering Rule10 of the Pan Masala Packaging Machine (Capacity Determination and Collection of Duty) Rules, 2008 held that the claiming the abatement without paying the duty for the period when the machine was under closure is in order, therefore, on this account the demand is not sustainable. Some of the judgments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he machine was operated only during that period. From the above Rule 10 we do not find any provision for payment of duty for the whole month and thereafter to claim refund on account of abatement of duty. There is no dispute even by the department that the appellant is not liable to pay duty during the period when the machine was not in operation. The contention of the Adjudicating Authority is that the appellant was supposed to pay the entire duty first and thereafter claim the refund. In the present case, the appellant is eligible for abatement in principle and under no circumstances the full duty can be demanded for the period of abatement when the machine was not in operation. This issue has been considered in various judgments. 4.1 In the case of Commissioner v. Thakkar Tobacco Products Pvt. Ltd. - 2016 (332) E.L.T. 785 (Guj.) the Hon ble Gujarat High Court considered the same issue and passed the following judgment : 9. The facts of the case are required to beexamined in the light of the above statutory provisions. From the facts noted hereinabove, it is apparent that the assessee did not produce the notified goods during a continuous period of fifteen days in the month of Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e abatement, however, is subject to the condition stipulated in Rule 10, namely that, the manufacturer of such goods is required to file an intimation to that effect with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise as the case may be, with a copy to the Superintendent of Central Excise, at least three working days prior to the commencement of such period, who on receipt of such information, is required to direct sealing of all the packing machines available in the factory for the said period under the physical supervision of Superintendent of Central Excise, in the manner that these cannot be operated during the said period. Thus, subject to the fulfilment of such conditions, Rule 10 of the PMPM Rules provides that the duty calculated on a proportionate basis shall be abated. 10. Since great emphasis has been laid on the circular dated 12th March, 2009 on behalf of the appellant for contending that the principle of contemporanea expositio guides that contemporaneous administrative construction should be given considerable weight and should not be lightly overturned, it may be apposite to examine the nature of the said circular. A perusa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the required procedure of due intimation of closure, sealing and due intimation or reopening was followed. Thus, there was no dispute that the requirements of Rule 10 of the PMPM Rules had been fulfilled. There was also no dispute that the amount adjusted was not more than the amount of duty mandated to be abated in terms of Rule 10 of the PMPM Rules. The Tribunal has taken note of the fact that Rule 10 of the PMPM Rules does not make any stipulation about abatement having to be claimed by filing an application, though it also does not imply to the contrary. Referring to Rule 9 of the PMPM Rules, it was observed that when the intention of the Government is that the amount is to be refunded and an express provision is provided therefor, whereas Rule 10 does not make any such provision. It may be noted that insofar as Rule 96ZO of the Central Excise Rules is concerned, sub-rule (2) thereof expressly provides for claim of abatement being made under sub-section (3) of Section 3A of the Act, which would be allowed by an order passed by the Commissioner of Central Excise of such amount as may be specified in such order. Similarly, sub-rule (7) of Rule 96ZQ provides for abatement being a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in any manner, violative of the rules or the statutory scheme. 15. Besides, in the light of the findingsrecorded by the Tribunal to the effect that it is not disputed that the adjustments made were not more than the amounts of duties mandated to be abated as per Rule 10 of the PMPM Rules, the action of the respondent-assessee in computing the proportionate amount of duty towards the abatement and setting it off against the duty payable in the next month does not adversely affect the revenue in any manner. The abatement, in the opinion of this Court, is not akin to refund and means reduction or diminution of the duty. Therefore, when the duty stands reduced to the extent provided in the rule, there is no liability to pay the same, inasmuch as, to that extent the duty stands abated. Therefore, if the assessee has correctly calculated the proportion of duty and set off the same against the duty payable for the next month, it cannot be said that the said action is contrary to the statutory scheme. When the rules do not provide for the manner in which duty is required to be abated, nor do they provide that abatement shall be by an order of the Commissioner or any authority, but noneth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded as under :- 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 the monthly duty on notified goods is to be paid by 5th day of the month and the assessee cannot simpliciter claim set off without first depositing the same had been repelled by the Gujarat High Court in the case of Thakker Tobacco (supra) holding that Rule 10 of the PMPM Rules, 2008 envisages a situation and provides for abatement of excise duty calculated on proportionate basis, in case where factory does not produce notified goods during continuous period of 15 days or more. 23. Moreover, the statute, that is proviso to sub-section (2) of Section 3A itself provides for abatement where a factory producing notified goods did not produce the same during any continuous period of 15 days or more, the duty calculated on the proportionate basis shall be abated in respect of such period, if the manufacturer of such goods fulfils such condition as may be prescribed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n accordance with Rules 7 and 9 of the Rules by including excise duty payable from 1-4-2011 to 5-4- 2011. The respondent thereafter, vide letter dated 23-5-2011, prayed for abatement of excise duty of Rs. 8,33,333/- for the first five days of April from 1-4-2011 to 5-4-2011 during which period, machines remained sealed the department rejected the application, by holding that 15 days continuous period of non-production, in a calendar month alone, entitles an assessee to abatement. The respondent filed an appeal which was allowed by the Commissioner (Appeals). An appeal filed by the revenue, before the Tribunal, has been dismissed by holding as follows :- We do not find merit in above submission. The plea taken by ld. DR is misconceived and is based on incorrect reading of Rule 10 quoted above. Bare reading of the above quoted rule would show that as per the rule an assessee is entitled to abatement provided there has been no production in the factory for a continuous nonproduction of excisable goods should be during a given calendar month. Admittedly in this case, there was no production. In the factory of the assessee for a continuous period 36 days and all the 40 Gutkha machines w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... October was around 22 days, he allowed the abatement, but confirmed the demand of duty for the period 17-9-2010 to 30-9-2010. 4. We find that on the said issue, there are number of decisions of the Tribunal laying down that the period of 15 days closure, need not fall within the same calendar month. It is sufficient if the unit is closed for a continuous period of 15 days, irrespective of the fact that the said period falls within two calendar months. One such reference can be made to the Tribunal decision in the case of CCE, Bhopal v. Kaipan Pan Masala Pvt. Ltd. reported in 2012 (285) E.L.T. 296 (Tri. - Del.). As such, we find no merits in the above reasoning of the Revenue. 5. The adjudicating authority has also referred to the fact that in terms of the said rules, the appellant is first required to discharge its duty liability for the entire month and then to claim abatement. The contention of the learned advocate is that inasmuch as they were a new unit, they were required to discharge their duty liability within a period of 5 days from the date of the production. As the appellant knew that their factory is going to be closed from 17-9-2010 and the due intimation was given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milar issue and passed the following order:- 7. At the outset it must be noticed that para 2 of the impugned order of the CESTAT (of which only a typed copy has been placed on record by the appellant) erroneously refers to the sealing of the packing machines of the assessee in the month of July, 2012 although admittedly the appeal pertains to the determination by the Commissioner of the SCN pertaining to closure of the packing machines in the month of August, 2012. 8. The CESTAT in the impugned order notes in para 4 that there was no dispute about the appellant s entitlement to abatement and that Revenue s only objection was as regards the non-compliance by the assessee with the procedural obligation under the PMPM Rules. The CESTAT then proceeded to rely upon its earlier decision in Shree Flavours Pvt. Ltd. v. CCE, Delhi-IV - 2014 (304) E.L.T. 441 (Tri. - Delhi) wherein it took note of another earlier decision in Kaipan Pan Masala Pvt. Ltd. - 2012 (285) E.L.T. 296 (Tri. - Delhi) in which it was held that non-deposit of the duty and any subsequent claiming of abatement in violation of the procedure under the PMPM Rules would not result in the substantive benefit being denied to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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