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2015 (8) TMI 25

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..... Rule 10 are clear that the manufacturer shall calculate the duty by reducing amount on a proportionate basis in respect of non-production of goods. Decision of the Tribunal in the case of Thakkar Tobacco Products Pvt.Ltd (2015 (2) TMI 606 - CESTAT AHMEDABAD) followed. It is noticed that the same view was taken by the Tribunal in the case of Trimurti Fragrances Pvt. Ltd & others (2015 (8) TMI 34 - CESTAT NEW DELHI) and Godfrey Philips India Ltd (2015 (8) TMI 35 - CESTAT NEW DELHI). Hence, the impugned orders cannot be sustained. - Accordingly, the impugned orders are set aside. - Decided in favour of assessee. - Appeal No.E/11938-11940/2013-DB; E/14111-14112/2013-DB - Order No.A/11068-11072/2015 - Dated:- 22-7-2015 - MR. P.K DAS AND MR. P.M. SALEEM, JJ. For The Appellant: Shri D.K. Trivedi, Advocate, Shri P.M. Pandya, Shri N.K. Tiwari, Consultant For The Respondent: Shri A.K. Raha, Special Counsel, Dr. J. Nagori, Authorised Representative Per: P.K. Das A common issue is involved in these appeals and therefore, all are taken up together for disposal. 2. The relevant facts of the case, in brief, are that the Appellants were engaged in the manufacture of Ja .....

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..... Vs C.C.E. S.T. Ghaziabad - 2015-TIOL-1216-CESTAT-DEL. He also relied upon the decision of Hon ble Allahabad High Court in the case of Steel Industries of Hindustan Industrial Area Vs CCE Ghaziabad - 2013 (293) ELT 191 (All.). 4. The learned Special Counsel appearing on behalf of the Revenue fairly submits that the issue may be covered by the earlier decisions of the Tribunal, but, in those cases, the Bench had not considered the correct legal position. The submissions of the learned Special Counsel, are, precisely, as under:- i) It is not a case of self-assessment. As per Rule 6(2) of the said Rules 2010, Annual Capacity of Production is determined by the Deputy Commissioner/ Assistant Commissioner of Central Excise and pass order, which would be treated as an Assessment order for payment of duty. Unless, the Appellants challenge the Assessment order, any subsequent claim cannot be sustained. In terms of Rule 19 of Rules 2010, the provision of Assessment order under the Central Excise Act, 1944, and the Rules made thereunder, would apply in Rules 2010. Reliance is placed on the decisions of the Hon ble Supreme Court in the case of Priya Blue Industries Ltd Vs Commissioner o .....

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..... e case of Thakkar Tobacco Products Pvt.Ltd. Others (supra), but, the Bench has not considered certain legal provisions in proper manner and the impugned orders are liable to be upheld. For the purpose of proper appreciation of the case, the relevant portion of the decision of the Tribunal in the case of Thakkar Tobacco Products Pvt.Ltd. Others (supra) are reproduced below:- 5. Extensively heard the arguments and contentions of both sides. At the very outset, it needs to be recorded that in none of the impugned orders, it in dispute that there was a closure of factory for more than 15 days and the required procedure of due intimation of closure, sealing and due intimation of re-opening was followed. In other words, it is not in dispute that the requirements stipulated in Rule 10 of the said Rules were fulfilled. It is also not disputed that the adjustments made were not more than the amounts of duties mandated to be abated as per the said Rule 10. 6. We find that the said Rule 10 does not make any stipulation about the abatement having to be claimed by filing an application therefor although it does not imply anything to be contrary either. We find the Rule 9 of the said .....

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..... e 96ZO. However, the above claim should be subject to verification by the jurisdictional Assistant Commissioner of Central Excise. If such a closure is for a reasonably long period, periodic verification about the continued closure should be done by the jurisdictional Assistant Commissioner of Central Excise. Our attention was also drawn to CBEC Circular No.485/51/, d.15.09.1999, which was issued in relation to Rule 96ZQ as it existed prior to 28.02.1999. 2. The Board has examined the matter. Under rule 96ZQ as it existed prior to 28-2-1999, the prerequisites for grant of abatement on closure of stenter were the stenter should have been completely closed for a continuous period of not less than 7 days and the processor should give at least 3 days notice, before closure, to the Jurisdictional Deputy/Assistant Commissioner. On receipt of the notice, the stenter was required to be sealed in such a manner as prescribed by the Commissioner. If these conditions were satisfied, then the processor was eligible for abatement. Where the stenter was closed as on 16-12-1998 itself, the question of 3 days advance notice for closure did not arise. In that case, the stenter should have be .....

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..... t of duty for the entire period of the month as is evident from the language of that Rule [96ZQ(7)(e)], which is reproduced below:- When the claim for abatement by the independent processor is for a period of less than one month, he shall be required to pay the duty, as applicable, for the entire period of the month and may subsequently seek such claim after payment of such duty . Needless to say that such a requirement is conspicuous by its absence in Rule 10 of the said Rules. Earlier also, the Tribunal in the case of Balkrishna Textile Ltd Vs CCE Ahmedabad - 2003 (161) ELT 740 (Tri-Del), in effect held as under:- It is clarified in the circular that where independent processor was eligible for abatement, it should be granted to him whether he has paid the duty first or did not pay the duty in anticipation of the order of abatement. Though Rule 96ZQ did not contain any specific provision in this regard, there was no specific provision to deny it either . The Board, therefore, decided that the Commissioner should decide first whether the processor was otherwise eligible for abatement or not. In case he is eligible and he had not paid the duty, the abatement should .....

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..... puty Commissioner or the Assistant Commissioner of Central Excise, shall after making such enquiry, approve the declaration and pass an order concerning annual capacity of production of the factory. Rule 7 of the Rules 2010, provides that the duty payable for a particular month shall be calculated by application of the proper rate of duty specified in the notification of the Government of India, in the Ministry of Finance, No.16/2010-CE, dt.27.02.2010 to the number of packing machines in the factory during the month. Rule 9 of the said Rules 2010, provides the manner and the payment of duty and interest. The monthly duty payable on notified goods shall be paid by the 5th day of the same month and intimation shall be filed with the jurisdictional Superintendent of Central Excise before the 10th of the same month. 4th Proviso to Rule 9 provides that in case a manufacturer permanently discontinues manufacture of goods of existing retail sale price or commences manufacture of goods of a new retail sale price during the month, the monthly duty payable shall be recalculated on the pro rata basis of the total number of days and in case the amount of duty so recalculated is less than the d .....

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..... ctory for the said period under the physical supervision of Superintendent of Central Excise, in the manner that the packing machines so sealed 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. 11. The word abate as per the Concise Oxford English Dictionary means 1. (of something bad) becomes less intense or widespread. 2. law reduce or remove (a nuisance) . Abate is to put an end to; nullify (as a nuisance); to reduce in degree or intensity; dimi .....

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..... dition for claiming it under Rule 96ZQ of the erstwhile Central Excise Rules, 1944, which was discussed by the Tribunal in the case of Thakkar Tobacco Products Pvt.Ltd. Others (supra). 13. The learned Special Counsel further submits that it is not the case of self-assessment procedure. In other words, in terms of Rule 6(2), the Deputy Commissioner or the Assistant Commissioner of Central Excise shall pass an order determining the Annual Capacity of Production for payment of duty on monthly basis, which may be treated as an assessment order, and therefore, unless it is challenged, the Appellants have no right to avail the abatement. We do not find force in the submission of the learned Special Counsel. It is pertinent to note that Rule 6 of Central Excise Rules, 2002 provides Assessment of duty. In terms of Rule 6 of Rules 2002, the Assessee shall himself assess the duty payable on any excisable goods except in the case on Cigarettes. In the case of Dhariwal Industries Ltd [2013 (289) ELT 227 (G.O.I.), Govt. of India observed that Pan Masala Packing (Capacity Determination and Collection of Duty) Rules 2008, (similar to Rules 2010 herein), provides self-assessment procedure/ .....

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..... Special Counsel is that Rule 2010 was framed by the Central Government to safeguard the interest of the Revenue in respect of the evasion of duty. The Hon ble Supreme Court in the case of Doaba Steel Rolling Mills (supra) observed that the provisions authorized the Central Government to notify certain goods for levy and collection of duty of excise in such goods, in accordance with the provisions of the said Section, having regard to the extent of evasion of duty as also other relevant factors. In that case, the question for consideration was whether Rule 5 of Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 will apply in a case where a manufacturer proposes to make some change in installed machinery or any part thereof and seek the approval of Commissioner of Excise terms of Rule 4(2) of the said Rules. The Hon ble Supreme Court observed that Rule 5 of the 1997 Rules will be attracted for determination of the annual capacity of production of the factory when any change in the installed machinery or any part thereof is intimated to the Commissioner of Central Excise in terms of Rule 4(2) of the said Rules. Thus, the observation of Hon ble Court was in the contex .....

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