2018 (7) TMI 1110 - AT - Central Excise

Abatement under Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008 - manufacture of Pan Masala & Gutkha - no production for a continuous period of 15 days or more - whether appellant can take suo-motu abatement u/r 10 of PMPM Rules, 2008 wherein admittedly there was no production for a continuous period of 15 days or more? Held that - The issue herein is squarely covered in favor of the assessee by the ruling of Division Bench of this Tribunal in the case of M/s Thakkar Tobacco Products Pvt. Ltd. & Others 2015 (2) TMI 606 - CESTAT AHMEDABAD , where it was held that if factory remains closed for a period of 15 days or more, after payment of duty by 5th of April, for the subsequent month, assessee adjusted the amount of abatement under Rule 10 and paid the balance, it was also held that in a series of judicial pronouncements, a consistent approach has been taken to the effect that in case of such adjustment of duty which is mandatorily required to be abated, Revenue cannot insist upon recovery of amount so adjusted. The appellant shall also be entitled to refund of the amount of interest adjusted by giving refund of the abatement amount - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
- Whether the appellants engaged in the manufacture of Pan Masala & Gutkha can take suo-motu abatement under Rule 10 of PMPM Rules, 2008 when there was no production for a continuous period of 15 days or more.

Analysis:

Issue 1: Suo-Motu Abatement Claim by M/s AMP Pan Products Ltd.
In the case of M/s AMP Pan Products Ltd., the appellant filed an abatement claim for the month of March due to the closure of their factory for a period. The Assistant Commissioner did not dispose of the abatement application, so the appellant adjusted the abatement amount suo-motu while paying duty for another month. The Revenue objected to this adjustment, issued a Show Cause Notice, and raised a demand. The Tribunal considered the issue of taking suo-motu abatement, citing a previous ruling by a Division Bench that supported the assessee's position. The Tribunal allowed the appeal, set aside the impugned order, and held that the appellant was entitled to a refund of the interest adjusted.

Issue 2: Suo-Motu Abatement Claim by M/s Simla Special Flavour
In the case of M/s Simla Special Flavour, the appellant did not produce notified goods for a continuous period of 15 days in March, leading to duty payment for the operational days. However, duty for the closure days was not paid by taking suo-motu abatement, resulting in a demand by the Revenue. The Tribunal referred to the previous ruling supporting the adjustment of duty under Rule 10, emphasizing that the claim of abatement had no relation to the determination of Annual Capacity of Production. Consequently, the Tribunal allowed the appeal, rejecting the order in original and granting consequential benefits to the appellant.

In conclusion, the Tribunal allowed both appeals, holding that the issue of taking suo-motu abatement was in favor of the appellants based on previous rulings. The impugned orders were set aside, and the appellants were granted refunds and consequential benefits.