TMI Blog2013 (4) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... of operating packing machines have been changed during the month or that some machines were not working during the entire month, the number of operative packing machines shall be taken as the maximum number of packing machines installed on any day during the month and even if, a machine was not working for certain periods in a month, the same shall be deemed to be operating packing machines for the entire month The provisions of Pan Masala Packing Machines Rules, 2008 cannot be interpreted from the language used in the Notification No. 42/2008-C.E., more so, when in terms of para 2 of the Notification No. 42/2008-C.E., the number of packing machines shall be determined in terms of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 and in view of the second proviso to Rule 8, even if an installed packing machine was not working during a month, the same shall be deemed to be operating packing machines during the whole month and accordingly duty in respect of that machine would be charged as if it had been operated during the entire month and not for a fraction of the month for which it was actually operational. We, therefore, are of the prima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouches of RSP upto Re. 1/- per pouch, the deemed production per month per machine is 37,44,000 and for pouches with RSP from Rs. 1.51 to Rs. 2 per pouch, deemed production machine per month is 3556800. On the basis of declaration given by the manufacturer, under Rule 6(1), the jurisdictional Asstt./Dy. Commissioner after conducting inquiry, if any required and also physical verification and satisfying himself about the correctness of the same, shall approve the declaration and determine Annual Capacity of Production by application of appropriate quantity deemed to be produced by one operating machine as is specified in Rule 5 to the number of operating machines in the factory during the month beginning which the capacity is being determined. According to sub-rule (4) of Rule 6, the number of operating packing machines every month shall be equal to the number of packing machines installed in the factory during that month. Under sub-rule (5) of Rule 6, the number of machines which the manufacturer does not intend to operate shall be un-installed and sealed by the jurisdictional Central Excise Superintendent and removed from the factory under the physical supervision and if it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise of the date from which he would start the production whereupon the seals fixed on the packing machines would be opened under the supervision of the jurisdictional Superintendent of Central Excise. The period for which the abatement under Rule 10 had been allowed, the proportionate duty for the period of non-production shall not be charged. 1.1 In this case the appellant filed six abatement claims for various periods for total amount of Rs. 3,91,90,765/- before the jurisdictional Dy. Commissioner, who allowed the same. However, the Commissioner was of the view that these abatements have been wrongly allowed, as either the period of closure of the factory was less than 15 days or even in the cases where the period of closure was 15 days or more, the appellant had been making clearances of specified goods and hence, in terms of the provisions of Rule 10 the abatement could not be allowed. It is on this basis that the Commissioner vide order-in-original No. 20/COMMR./NOIDA/2010 dated 24-12-2010 confirmed the duty demand of Rs. 3,91,19,765/- against the appellant along with interest. Against this order of the Commissioner, Appeal No. E/789/2011 along with stay applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions. 3. Shri T.R. Rustogi, Advocate, ld. Counsel for the appellant, pleaded that in terms of Rule 7 of Pan Masala Packing Machine Rules, the duty payable for a month is to be calculated by applying the appropriate rate of duty specified in Notification No. 42/2008-C.E., dated 1-7-2008 to the number of operating packing machines in the factory during the month, that Notification No. 42/2008-C.E., prescribes rate of duty per packing machine per month, that in view of this, when a particular packing machine is not operated during certain days of a month, the duty payable for that month has to be proportionately reduced and the duty cannot be charged for the entire month, that Rule 8 would apply only in two circumstances - firstly when either the manufacture had not filed the declaration under Rule 6 and has not made further declaration under Rule 6(6) in case of change in parameters already declared under Rule 6(1) and secondly where in case of addition or installation of machines, the manufacturer has not filed any intimation to the Dy./Asstt. Commissioner in writing as per the mandate of Rule 13, that in this case, therefore, the application of Rule 8 does not arise, as there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Jt. CDR, opposed the stay applications and emphasized the following points:- (1) So far as the duty demand of Rs. 8,59,46,469/- is concerned, this duty has been correctly demanded, as in terms of the provision of Rule 8 of the Rules, in case of non-working of any installed packing machines during the month for any reason whatsoever, the same shall be deemed to be operating packing machine for the month and in case of addition or installation or removal or un-installation of the packing machines during the month, the number of operating packing machines for the month shall be taken as maximum number of packing machines installed on any day during the month. The number of operating packing machines for the purpose of charging duty under Rule 7 has to be determined under Rule 8 and from the provisions of Rule 8, it is clear that the number of operating making machines in a month would be a maximum number of packing machines installed on any day. This Rule also provides that if a machine is not operating during certain period in a month, it will be deemed to be operating packing machine for the entire month. In view of this, the practice adopted by the appellant of paying duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overns the abatement is reproduced below :- Rule 10 of Pan Masala Packing Machine Rules, 2008 10. Abatement in case of non-production of goods. - In case a factory did not produce the notified goods during any continuous period of fifteen days or more, the duty calculated on a proportionate basis shall be abated in respect of such period provided the manufacturer of such goods files an intimation to this effect with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise, at least seven days prior to the commencement of said period, who on receipt of such intimation shall direct for sealing of all the packing machines available in the factory for the said period under the physical supervision of Superintendent of Central Excise, in the manner that these cannot be operated during the said period: Provided that during such period, no manufacturing activity, whatsoever, in respect of notified goods shall be undertaken and no removal of goods shall be effected by the manufacturer: Provided further that when the manufacturer intends to restart his production of notified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty from Gutka/Pan masala units, as envisaged under these Rules. It appears that it is not the case of the appellant that during the period of abatement, there was total stoppage of production and clearances. In respect of certain periods, for which abatement has been claimed, the Department s allegation is that period of non-production is less than 15 days, an allegation which has not been refuted by the appellant. In view of this, we are of the prima facie view that so far as the duty demand of Rs. 3,91,19,765/- against the appellant vide Order-in-Original No. 20/COMMR/NOIDA/2010 dated 24-12-2010 is concerned, the appellant do not have prima facie in their favour notwithstanding the fact that the order has been passed ex parte. 6. As regards, the duty demand of Rs. 8,59,46,469/- confirmed against the appellant vide Order-in-Original No. 19/COMMR/NOIDA/2010 dated 24-12-2010, this demand is on the basis that during the period of dispute in certain months, the appellant had operated certain machines declared by them, only for a certain days in a month, and while in respect of those machines, in terms of the provision of Rule 7 read with Rule 8 and Notification No. 42/2008-C.E., th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r only 20 days, for the purpose of calculation of duty, all the ten machines shall be deemed to have operated for the entire month and the machine which operated only for 20 days will not be treated as having operated for 2/3 month but will be treated as having operated for full month. The provisions of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 cannot be interpreted from the language used in the Notification No. 42/2008-C.E., more so, when in terms of para 2 of the Notification No. 42/2008-C.E., the number of packing machines shall be determined in terms of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 and in view of the second proviso to Rule 8, even if an installed packing machine was not working during a month, the same shall be deemed to be operating packing machines during the whole month and accordingly duty in respect of that machine would be charged as if it had been operated during the entire month and not for a fraction of the month for which it was actually operational. We, therefore, are of the prima facie view that on this point also, the appellant have not been able to establish pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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