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2024 (3) TMI 792 - CESTAT ALLAHABADRemission of Central Excise Duty - Rule 21 of Central Excise Rules, 2002 - interpretation placed by the Commissioner on second proviso to rule 8 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008, tenable or not - unjust enrichment. Whether the claim made by appellant for remission of duty as per Rule 21 of Central Excise Rules, 2002 maintainable? - HELD THAT:- From perusal of Rule 21 of the Central Excise Rules, 2002 reproduced earlier (in the impugned order), it is quite evident that the said rule provides for remission of duty in respect of the finished goods lost or destroyed prior to clearance of the same from the factory of production. The wording of the rule is very clear and unambiguous. It is not the case of the appellant that any goods which were to be cleared on payment of duty subsequently have been destroyed in fire. But it is the case of appellant that on account of this fire accident that occurred in their factory they were unable to produce the goods during this period and hence there was loss of production capacity. Rule 21 do not provide for such a situation. Admittedly appellant has was operating under the Compounded Levy Scheme as provided by the section 3A of the Central Excise Act, 1944 read with Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008. It has been held by Hon’ble Supreme court in the case of M/S HANS STEEL ROLLING MILL VERSUS COMMNR. OF CENTRAL EXCISE, CHANDIGARH [2011 (3) TMI 2 - SUPREME COURT] that the scheme of Compounded levy scheme is totally a different and self contained scheme. Importing the provisions of any other scheme of taxation would only lead to catastrophic results. Whether the interpretation placed by the Commissioner on second proviso to rule 8 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008, tenable? - HELD THAT:- Rule 10 provides for the abatement of duty for the period of closure for whatsoever reason. In fact as per the submission of the appellant the unit was non operational for five days. Hence the benefit of abatement could not have been allowed. Section 3A (3) itself provides for the closure of the unit for fifteen days or more for allowing the abatement on proportionate basis. Any closure which is less than fifteen days is not recognized as closure by the statue, for the reason as stated in Sub Section (1) of Section 3A of the Central Excise Act, 1944 – these goods are evasion prone. The submissions made by the appellant relying on various case laws with regards to the legal fiction etc., cannot carry forward the case of the appellant in view of the statutory provisions as per the Central Excise Act, 1944 and the Rules - It is not found that Rule 21 of the Central Excise Rules, 2002 to be not applicable to the present case we are not pronouncing on various decision relied upon by the Appellant with regards to “natural cause or unavoidable accident.” Whether by rejecting the claim for remission the department is unjustly enriched? - HELD THAT:- Reliance has been placed by the Appellant on the decision of Hon’ble Supreme Court in the case of Kanhaiya Lal Mukund Lal Saraf, to argue that the revenue cannot be unjustly enriched at the expense of assessee. Howver we note that the said decision has been held to be not a good law by a nine judges bench of Hon’ble Supreme Court in the case of MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA [1996 (12) TMI 50 - SUPREME COURT] - Thus argument of unjust enrichment of the state has been considered and rejected by the Hon’ble Supreme Court as per the above stated decision. The case of THE SALES TAX OFFICER, BANARAS AND OTHERS VERSUS KANHAIYA LAL MAKUND LAL SARAF AND OTHERS [1958 (9) TMI 57 - SUPREME COURT] has been held to be not stating the correct position in law hence reliance placed by the counsel of appellant on this decision, is totally misplaced. The decision of Hon’ble Orissa High Court placing reliance on the said decision of Hon’ble Apex Court cannot also be pressed, because the said decision has been rendered before the decision of the decision in case of Mafatlal Industries, and has been held to be wrongly decided. There are no merits in this appeal - appeal dismissed.
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