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2022 (12) TMI 1141 - AT - Central ExciseNon-payment of Central Excise Duty on new packing machines added during the relevant month - non-payment on the ground that the number of old packing machine have been replaced with equal number machines and the total number of installed packing machines remained unchanged during the said relevant months - contravention of statutory provisions of Rule 6(4),7,8,9 and 13 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 - HELD THAT:- As regard the demand of Rs. 1,20,12,500/- we find that the case of the department is that provisions of Rule 8 nowhere provide the pro-rata payment of duty on the basis of date of installation of new Machines. As per department Appellant was required to pay duty for the whole month. The Learned Commissioner in impugned order also held that the Appellant was not entitled for the abetment of duty in case of non-production of the notified goods as provided in Rule 10. It should be appropriate at this juncture to re-visit the legal provisions. In the present matter undisputedly appellant had followed the procedure, as the appellant filed declaration regarding change of number of packing machines and the declaration was accepted by the proper officer after due verification, the declaration was accepted and the annual capacity of the machine was fixed by the competent jurisdictional officers and the appellant accordingly paid the duty. The same is also clear from the following correspondences. There is no misdeclaration found by Revenue on the part of appellant regarding number of machines used for manufacture of notified goods. In such circumstance demands of duty over and above the duty determined by the Jurisdictional officer legally not correct. It is clear the duty is payable on the number of installed machines which are deemed to be operating machines. In the present matter the number of installed machines in the month remained the same before and after replacement of the machines. Therefore, the demand confirmed by the Learned Commissioner in instant case is legally not correct. In the present matter Revenue cannot demand duty unless the orders of determination of production capacity based duty has been reviewed. In the present case, it is seen that the Appellant after following the proper procedure paid the duty assessed by the Jurisdictional Deputy Commissioner fixing annual capacity of production after the replacement of packing machines, however no action was taken by the department to modify these orders by filing review application or appeal. On this ground also demand is prima facie not sustainable. Appeal allowed.
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