TMI Blog2013 (1) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... re produced or manufactured in India. From this, it is evident that excise duty is an incidence of tax on production or manufactured of the goods. It is difficult to sustain the plea that the appellant assessee can be charged excise duty for the period during which his unit had not even commenced the production Following the decision in case of GODWIN STEELS (P) LTD. (2010 (5) TMI 322 - PUNJAB & HARYANA HIGH COURT) that it was wholly unjust for the department to recover the duty for the whole month, during which, its factory had not commenced production. When the factory of the petitioner was not in production, then obvious, it is not liable to pay the duty during the period of non-production Therefore the impugned order confirming de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d levy scheme of PMPM Rules, 2008 on pro rata basis for the period 4-5-2009 to 31-5-2009. 3. The Department was of the view that as per Rule 9 of PMPM Rules, 2008, the appellant was required to pay excise duty on compounded levy scheme for the entire month of May and no abatement of duty for the first three days was admissible to the appellant. Accordingly, show cause notice raising demand of Rs. 5,46,774/- with interest was issued. The Department also proposed to impose penalty on the appellant. 4. The appellant contested the show cause notice. The jurisdictional Assistant Commissioner after hearing the parties vide order-in-original dated 23-8-2010 confirmed the duty demand of Rs. 5,46,774/- against the appellant under Section 11A(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment on the contrary has argued in support of the impugned order and submitted that the duty demand has been rightly confirmed in view of Rule 9 of PMPM Rules, 2008. Learned A.R. further submitted that the judgment relied upon by the appellant is not applicable to the facts of this case as it is based upon the compounded levy scheme relating to the steel manufacturing unit. 9. The issue involved in this appeal is whether the revenue with the aid of Rule 9 of PMPM Rules, 2008 framed under Section 3A of the Central Excise Act, 1944 can levy and charge excise duty from the assessee for the period before the commencement of production in the unit? 10. In order to find answer to this question it would be useful to have a look on the rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. wherein while dealing with the similar issue of compounded levy scheme in relation to steel manufacturing unit it was held thus :- 3. After hearing the learned counsel for the parties, we are of the considered opinion that as the petitioner s factory started production with effect from 17-11-1997, therefore, it was wholly unjust for the department to recover the duty for the whole month of November, during which, its factory had not commenced production. When the factory of the petitioner was not in production, then obvious, it is not liable to pay the duty during the period of non-production . 11. In view of the above discussion, we find it difficult to sustain the impugned order. Accordingly, the appeal is accepted and the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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