2017 (3) TMI 920 - AT - Central Excise

Refund claim - abatement of duty - sealing of machinery - denial of refund on the ground that the respondent failed to clear the stock of finished goods within a period of two days from the date of closure as specified in Rule 10 of the Pan Masala Packing Machines (Proviso) - the main issue is how to complete the period of two days within which the respondent is required to clear the goods manufactured and not stock at the time of closure of the machine - Held that - as last day of the prescribed two days period is Sunday which is holiday and no production and clearances are undertaken on Sundays. Hence, clearance of notified goods on the very next day i.e. Monday on 11.07.2011 is to be considered as done or taken in due time in terms provisions of section 10 of the said act which is also applicable to Pan Masala Packing Machine Rules 2008 in terms of provisions of Rule 18 of the said rules - appeal dismissed - decided against Revenue.

Summary

Issues:
- Challenge to order dated 10.04.2012 passed by the Commissioner (A) Raipur regarding refund/abatement of duty for the closure period of 17 days.
- Interpretation of Rule 10 of the Pan Masala Packing Machines Rules 2008 in relation to clearance of goods within two days of closure of machines.
- Application of Section 10 of the General Clause Act, 1897 in computing the period for clearance of goods.
- Decision on refund entitlement amounting to ?25,63,710.

Analysis:

1. The appeal was filed by Revenue challenging the Commissioner (A) Raipur's order regarding the refund/abatement of duty for a closure period of 17 days. The respondent, engaged in the manufacture of pan masala and gutkha under the Central Excise Act, requested sealing of packing machines as per rules. The dispute arose when the Deputy Commissioner rejected the refund claim, citing failure to clear finished goods within two days of closure as mandated by Rule 10 of the Pan Masala Packing Machines Rules 2008.

2. The Revenue contended that the two-day clearance period should have ended on 09-10/07/2011, while the finished goods were actually cleared on 11/07/2011. The Commissioner (A) allowed the refund, invoking Section 10 of the General Clause Act, 1897, which states that if the last day of a prescribed period is a holiday, the act can be done on the next working day. This provision was deemed applicable to the case, justifying the clearance on 11.07.2011, a Monday after the Sunday holiday.

3. The Commissioner's decision was based on aligning the clearance date with the provisions of the General Clause Act and Rule 18 of the Pan Masala Packing Machine Rules 2008, ensuring due time compliance. The refund entitlement of ?25,63,710 was upheld, and the appeal by Revenue was dismissed. The reasoning provided by the Commissioner (A) was deemed sound, and no valid reason was found to interfere with the impugned order, thus sustaining the decision.

In conclusion, the judgment delved into the interpretation of rules governing the clearance of goods within a specified period, the application of the General Clause Act to compute time for compliance, and the ultimate entitlement to a significant refund amount. The decision upheld the Commissioner's ruling, emphasizing adherence to statutory provisions and justifying the refund claim based on legal interpretations and factual circumstances.