TMI Blog2011 (4) TMI 995X X X X Extracts X X X X X X X X Extracts X X X X ..... two different notified goods were manufactured on the same machine during the period, their Retail Sale Prices get changed and deeming provision relating to new Retail Sale Price gets attracted. Facts of the case as also the legal provisions do not at all warrant this assumption. - Decided in favor of assessee. - - - 137-CE/LKO/2011 - Dated:- 25-4-2011 - Shri S.B. Mishra, J. REPRESENTED BY : Shri Amit Awasthi, Advocate for the Assessee. [Order]. The instant Appeal No. 339 of 2010 dated 22-10-2010 has been filed by M/s. Durga Trading Company, Krishna Colony, Khurshed Bagh, Lucknow (hereinafter referred to as Appellants) against the Order-in-Original No. 58/ADC/LKO/2010, dated 16-8-2010 issued under F.No. V.(30) V(30) ADC/LKO/99/09/Pt passed by the Additional Commissioner Central Excise Commissionerate, Lucknow. 2.1 Brief facts of the case are that the appellants are engaged in the manufacture and clearance of Pukar Brand Pan Masala (not containing tobacco) (herein after referred to as Pan Masala ) and Pukar Brand Pan Masala (containing tobacco) (herein after referred to as Gutkha ) falling under Chapter sub-heading No. 2106 90 20 and 2403 99 90 respectively ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The adjudicating authority had also imposed a penalty of Rs. 2,00,000/- in Shri Alim Ali, Authorized Signatory of the appellants under Rule 26 of the Central Excise Rules, 2002. Against this Order-in-Original dated 23-3-2010, the appellants filed an Appeal No. 178 of 2010 dated 3-6-2010 before the Commissioner (Appeals), Customs Central Excise Service Tax, Lucknow which was rejected vide Order-in Appeal No. 119-120/CE/LKO/2010, dated 29-6-2010. 2.2 In the mean time and before adjudication of the show cause Notice dated 27-5-2009, the Department contended that since the appellants have manufactured Gutkha of Retail Sale Price of Re. 1/- and Pan Masala of Retail Sale Price of Re. 1/- both on the said 5 pouch packing machines in a month, these 5 pouch packing machines shall be treated as additional machines in terms of Rule 6(6), 8 and 13(2) of the Pan Masala Rules, 2008. Second Show Cause Notice dated 7-12-2009 was accordingly issued to the appellants. This Show Cause Notice was adjudicated vide impugned Order-in-Original wherein the adjudicating authority confirmed the demand of differential Central Excise Duty amounting to Rs. 46,25,000/- and ordered recovery of the same fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter by revising it on positive note. The impugned SCN was to be decided in terms of existing provisions of law. Even if any amendment in law favouring the party is made, it has to be applied prospectively. 4.1 I have gone through the records carefully. The issue involved in the appeal is as to whether in the case of manufacturing two different notified goods of same Retail Price on the same pouch packing machine, it will be treated use and installation of one machine or two different machines in terms of Rule 8 of the Pan Masala Packing Machine (Capacity determination and Collection of Duty) Rules, 2008? 4.2 The Central Excise Officers visited the premises of the appellant on 29-11-2008 and found 30 pouch packing machines installed, out of which 29 machines were found engaged in packing of Pukar Brand Gutkha pouches of MRP Re. 1/- and one machine was found manufacturing Pukar Brand Pan Masala of MRP Re. 1/-, whereas appellant in their declaration dated 31-10-2008 had declared 24 pouch packing machines for manufacture packing of Pukar Brand Gutkha of MRP Re. 1/- and 6 pouch packing machines for manufacture of Pukar Brand Pan Masala of MRP Re. 1/-. Rate of per pouch packing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od on the point of the alleged manufacture of both Pan Masala and Gutkha having same RSP of Re. 1/- per pouch on respective packing machines. The Revenue while invoking Rule 13 of Rules, 2008, overlooked the fact that it was not the case of the Revenue of any addition or installation of packing machine and it was also not the case of the revenue that the Appellants has ever obliterated, tempered etc. or changed the MRP that what was declared on the packages, read with the declaration. Para-7 : The Appellant further say that 1st Proviso clause to Rule 8 of Rules, 2008 is not applicable in the Appellants case in as much as the Appellant was manufacturing product of same RSP i.e. Re. 1/- during the alleged period. Your goodself would appreciate that proviso clause to Rule 8 of the Rules, 2008 stipulates that in case a manufacturer commences manufacturing of goods of a new retail sale price during the month on an existing machine, it shall be deemed to be an addition in the number of operating packing machine for the month. Para-8 : The Appellant say that they were manufacturing Pan Masala/Gutkha of same RSP and they had not changed the RSP at any point of time on existing machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e during the same month is same i.e. Re. 1.00. 5.4 The entire scheme of duty liability based on capacity determination under Notification No. 30/2008 dated 1-7-2008 is based on the statutory provisions as contained in Section 3A of the Central Excise Act, 1944 in terms of which in respect of notified goods the Central Government may provide for rules inter alia specifying the factor relevant to the production of such notified goods. Under Notification No. 29/2008 dated 1-7-2008, Pan Masala falling under tariff item No. 21069020 and Gutkha under tariff item No. 24039990 are specified. Notification No. 42/2008 dated 1-7-2008 and Notification No. 30/2008 dated, 1-7-2008 are issued under Section 3A of the Central Excise Act, 1944 providing for the manner for determination of annual capacity of the production of the factory, factor relevant to the production of notified goods and the quantity that shall be deemed to be produced as also the rates of duty and other related mechanisms. These notifications inter alia provide the factors in terms of which the duty liability from Pan Masala manufacturers shall be computed. The basic parameters with reference to which this computation shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Appellants had manufactured notified goods of new Retail Sale Price, they are required to pay duty on proportionate basis under fourth proviso to Rule 9 which provides Manner of payment of Duty Interest . Nowhere in the show cause notice dated 7-12-2009 nor in the Order-in-Original dated 16-8-2010 has the department computed any duty on proportionate basis, thereby implying that no new Retail Sale Price had come into existence. The legal provision is very clear by employing the word new Retail Sale Price, implying that there was some old Retail Sale Price in relation to manufacture of goods on an existing machine. The provision of proportionate computation also implies that two distinct Retail Sale Prices have to be there. The facts of the case are absolutely clear to the effect that only one Retail Sale Price i.e. Re. 1/- alone was there. According to para 4 of the show cause notice dated 7-12-2009 the fact relating to manufacture of Pan Masala and Gutkha both of RSP Re. 1/- stood declared. It is mentioned in para 3 above that the Chief Commissioner, Customs, Central Excise Service Tax, Lucknow has not agreed to fastening further duty liability on a pan Masala man ..... X X X X Extracts X X X X X X X X Extracts X X X X
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