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TMI Blog2025 (1) TMI 1370X X X X Extracts X X X X X X X X Extracts X X X X ..... ver the machines were made operational, the appellant have informed the department and they have started operating the machine only after the officers have de-sealed the machines.
So, it is apparent from the reading of Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 that abatement for the period of non-working of the machines is provided in Rules with certain conditions.
This Tribunal in the case of M/s. PM Products vs. CCE, Ahmedabad [2023 (9) TMI 1370 - CESTAT AHMEDABAD] has held that the appellant is eligible for abatement and under no circumstance full duty can be demanded for the period when the machines were not in operation.
Conclusion - The essence of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 is that the manufacturer has to pay duty for the operational days of the machines, and since the appellant has deposited the proportionate amount of duty for working days of the machines, the Central Excise duty cannot be demanded for the period when the machines remained non-operational.
Appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... aw. The appellant in support of their submission have placed reliance on the following Hon'ble High Courts as well as Tribunal's decisions:- (a) M/s. PM Products vs. CCE, Ahmedabad - (2023) 4 Centax 419 (Tri. Ahmd.) (b) CCE vs. Thakkar Tobacco Products Pvt. Limited - 2016 (332) ELT 785 (Guj.) (c) CCE Kanpur vs. Trimurti Fragrance Pvt. Limited - 2019 (370) ELT 257 (All.) 4. We have also heard Shri Rajesh R Kurup, learned Superintendent (AR) appearing for the Revenue who has reiterated the findings as given in the impugned order-in-original dated 25.09.2012. 5. Considering the submissions made by both the sides, we are of the view that it will be proper to have a glance at the findings given in impugned order-in-original. We reproduced the relevant portion of the impugned order-in-original:- "11. Regarding differential duty demand of Rs. 25,00,000/- for the month of April, 2011, as per the show cause notice, the said assessee had 4 machines already operative as on 01.04.2011 and they got added 4 more machines for manufacturing Gutkha of MRP of Rs. 1/- from 16.04.2011 and paid duty proportionately which is contravention of Rule 8 of the said Rules and therefore there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty for the entire month. I find that on 09.05.2011 the said assessee filed declaration in Form-1 seeking de-scaling of 4 machines with effect from 10.05.2011 for manufacturing for the first time the product "Gutka" having new retail sale price of Rs.1.50. Since this was a new product having new retail sale price, they paid duty from the date of commencement of production of product of new retail sale price, As per Rule 6 (6) of the said Rules, they filed a declaration in Form-1 and in terms of their declaration, the authority fixed the AFC of new product of Rs. 1.50 under sub-rule (2) of Rule 6 of the said Rules. As per proviso 4 to Rule 9 of the said Rules, in case of commencement of 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 total number of days in that month and the number of days remaining in that month counting from the date of such commencement The said further provides that the manufacturer shall not discharge the duty liability unless the differential duty liability is paid by the 5th of the following month and in case the amount of duty so recalculated is less tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intimation shall direct for 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: Provided that during such period, no manufacturing activity, whatsoever, in respect of notified goods shall be undertaken and no removal of notified goods shall be effected by the manufacturer except that notified goods already produced before the commencement of said period may be removed within first two days of the said period: Provided further that when the manufacturer intends to restart his production of notified goods, he shall inform to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, of the date from which he would restart production, whereupon the seal fixed on packing machines would be opened under the physical supervision of Superintendent of Central Excise." So, it is apparent from the reading of Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 that abatement for the period of non-working of the machines is provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviding for the mode of availing abatement, the course of action adopted by the respondent-assessee cannot be said to be in violation of any rule or any provision of the Act. As can be seen on a plain reading of Rule 10 of the PMPM Rules, the same merely provides that in case of factory which has not produced the notified goods during a continuous period of fifteen days or more, the duty calculated on a proportionate basis shall be abated in respect of such period. The 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 condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f abatement being passed by the JDC/JAC. In the opinion of this Court, in the absence of the Act or the rules framed thereunder making any such provision, no such provision can be read into the Act and the rules. 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Q, 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 duty payable in the succeeding month is, in any manner, violative of the rules or the statutory scheme." 6. It can be seen that as per interpretation of Hon'ble High Court the essence of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 is that the manufacturer has to pay duty for the operational days of the machines and since the appellant has deposited the proportionate amount of duty of working days of the machines, we find that Central Excise duty cannot be demanded for the period when the machines remained non-operational. 7. Similarly, this Tribunal in the case of M/s. PM Products vs. CCE, Ahmedabad - (2023) 4 Centax 419 (Tri. Ahmd.) has also held that the appellant is eligible for abatement an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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