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2017 (7) TMI 459 - HC - Central ExciseRule 6(2) of the Pan Masala Packing Machines (Capacity Determination and Calculation of Duty) Rules, 2008 - packing speed of machines - The petitioner Company had declared the speed at 750 pouches per minute even when speed was not relevant for duty purpose, and had subsequently changed it to 1000 pouches per minute, when packing speed of the machine was relevant, and continued to declare it as such till such time the Company started getting complaints about the packing of the pouches. Held that: - Rule 6(2) of the Rules provides that when a declaration is made under Rule 6(1), the Deputy Commissioner or the Assistant Commissioner of Central Excise, as the case may be, may make such enquiry as may be necessary including physical verification and, thereafter, approve the declaration including the declaration with regard to maximum packing speed at which the machine can be operated for packing of notified goods of various retail sale prices and, consequently, determine and pass order concerning the annual capacity of production of the factory within 3(three) working days. The second proviso to Sub-rule 6(2) provides that if a manufacturer does not receive the approval in respect of his declaration within a period of 5(five) working days, the approval shall be deemed to have been granted subject to the modifications, if any, which the Deputy Commissioner or the Assistant Commissioner of Central Excise, as the case may be, may communicate later on but not later than 30(thirty) days of filing of the declaration. The approval of declaration is not automatic or routine and before the declaration is approved, the authority can make necessary enquiry including physical verification of the machine. The expression used in Sub-rule 6(2) is “maximum packing speed at which each of the packing machines available in his factory can be operated for packing” - While passing the aforesaid order dated 27.11.2015, it was noted that there was no good reason for physical verification of the machine to determine the maximum packing speed at which it could be operated. The aforesaid order was set aside by the Commissioner (Appeals) vide his order dated 30.08.2016 on an appeal preferred by the petitioner. It is not in dispute that the petitioner had paid excise duty based on the annual capacity production calculated on the basis that the maximum packing speed of the machine falls in the category of 301-750 pouches per minute. These findings have a direct bearing on the legality and tenability of the enquiry which is initiated solely for the reason of lowering the packing speed of the machine as the change of maximum packing speed of the machine was the central issue before the appellate authority. If it is permissible to change the parameter of maximum speed of the machine, that too, without any explanation, as held by the appellate authority, the very edifice of the enquiry has no foundation. In that context, the plea of the respondents that the issue of packing quality was not raised earlier pales into insignificance. The enquiry initiated against the petitioner company by letter dated 18.11.2015, in the facts of this case, ought not to be permitted to be continued and, therefore, the enquiry initiated in relation to packing machine ID No. 131023840 is quashed - petition allowed - decided in favor of petitioner.
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