2023 (5) TMI 803 - HC - Central Excise

Quantum of duty payable by the respondents - manufacturing and clearing of gutkha under the brand name India Gold - retrospective effect of amended Rule 17(2) of PMPMR-2008 - failure to consider the actual intent of the legislation as mentioned in Rule 17(2) of PMPMR-2008 - HELD THAT:- It is material to note that the premises of respondent no. 1 was searched on 04.08.2008. As on the date of the said search, Rule 17 as set out above was applicable. Respondent no. 1 is not registered with the Excise Department and there is no dispute that the Adjudicating Authority has determined the duty payable in terms of Rule 17(2) of the PMPM Rules as in force on the date of the search.

It is material to note that Rule 1(2) of the Second Amendment Rules expressly provides that “they shall come into force on 20.10.2008”. Thus, the contention that Rule 17(2) as amended by Second Amendment Rules would also apply to searches conducted prior to 20.10.2008 militate against the express language of Rule 1(2) of the Second Amendment Rules. Further, the contention that the language of Rule 17(2) as amended by the Second Amendment Rules, makes it explicit that it would apply from 01.07.2008, is unpersuasive. A plain reading of Rule 17(2) as amended by the Second Amendment Rules indicates that it provides for the manner of computing the duty payable in respect of goods manufactured or cleared from the unit, which is not registered with the concerned Central Excise office - Undisputedly, the duty is liable to be computed on the presumption that the machines found at such premises are in operation since 01.07.2008. The duty is required to be calculated by applying the appropriate rate of duty, as specified in the Notification No. 42/2008 – C.E. dated 01.07.2008, to the number of packing machines operating in the factory during that month.

In the present case, it cannot be accepted that it is implicit in the provisions of the amended Rule 17(2), that it applies retrospectively for purposes for determination of duty in respect of searches conducted prior to 20.10.2008. Undisputedly, for searches conducted after the Second Amendment Rules came into force, the duty would be determined by assuming – unless established to the contrary – that the machines found were operative from 01.07.2008 and by applying the computational provisions of Rule 7 of the PMPM Rules.

There are no ground to interfere with the impugned order. The questions projected by the Revenue are answered against the Revenue - appeal dismissed.