TMI Blog2015 (1) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... PackingRules, 2008. The proviso of sub rule (3) of rule (6) allows payment of duty on pro-rata basis. As such, the applicant who commenced production w.e.f. 22.04.2011 rightly paid duty on pro-rata basis. Under such circumstances, Government concurs with observation of Commissioner (Appeals) that allegation of short payment by the respondent is not tenable. Trade Notice No. 20/2011 dated 20.09.2011 issued on the basis of CBEC Circular F.No.528/69/2011-STO(TI) dated 30.08.2011 clarifying distinction between sachets and carry bags, cannot have retrospective effect. The clarification issued by Chief Commissioner Lucknow was binding on the Central Excise officers and as such the rebate allowed for duty paid on exported goods at the relevant time cannot now attract the provisions of condition 3(g) of Notification No. 19/2004-CE(NT) dated 06.09.2004. Departmental authorities are bound by Circular/Instruction and they have to comply with the same. Hon’ble Supreme Court has held in the case of Paper Products Ltd. Vs. CCE [1999 (8) TMI 70 - SUPREME COURT OF INDIA] that Circular/Instructions issued by CBEC are binding on departmental authorities. They cannot take contrary stand and de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pan Masala Packing Machines (Capacity determination and collection of duty) Rules 2008, the, option of payment of duty on pro-rata basis by the party suomoto is not available. Further, as per Pan Masala Packing Machines (Capacity determination and collection of duty) Rules 2008, the ,number of operating, packing machines for the months shall be taken as the maximum number of machines instated on any day during 'the month. In this way, party has short paid the Central Excise duty and thus the ratio calculated for sanctioning the rebate claim as per formula under Notification No. 32/2008-(NT) dated 28.08.2008 is also not correct. Therefore, the amount of rebate claims calculated on the basis of this ratio is also arrived at wrongly. 3.2 The Commissioner (Appeals) has erred in his findings that the party was a new manufacturer and therefore they have correctly discharged the duty against which rebate was sanctioned. The party was manufacturing `Gutkha' regularly during the relevant months. He has also erred in his findings that Section 3(A) of the Central Excise Act overrides the provision of Rule 8 of Pan Masala Packing Machines (Capacity determination and collection of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covering by this clarification prior to, 30.08.2011 are, not covered by the same since it cannot have retrospective effect. This finding is not correct as the law, i.e. Plastic Waste. (Management Handling) Rules, 2011 dated 04.02.2011 were in existence when the export took place and therefore any clarification issued subsequently would have no bearing and the party would not be able to escape from the statutory provisions of Plastic Waste (Management Handling)- Rules, 2011 dated 04.02.2011. Any circular and subsequently issuance of a trade notice on the basis of the same only facilitates interpretational aspects but it does not mean that the provisions of the relevant Act were not in force as on that date. 4. Show Cause Notices were issued to the respondent under Section 35EE of Central Excise Act, 1944 to file their counter reply. The respondent vide their written submission dated 21.07.2012 mainly stated as follows:- 4.1. The said Gutkha was manufactured and cleared for export to Afghanistan after permission of the Department and in pursuance of the minutes of the meeting held on 22.03.2011 in the chamber of Chief Commissioner, Central Excise and Service Tax, Delhi Zon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iso to Rule 6(3) of the Pan Masala Packing Machines (Capacity determination and collection of duty) Rules 2008, states that incase a new manufacturer commences production of notified gods, his annual capacity of production shall be calculated on the basis of the total no. of days in that year and the no. of days remaining In that year starting from the date of commencement of product of such notified goods. The respondent was issued registration certificate on 15.03.2011, and commenced his production on 22.04.2011 and paid appropriate duty of excise in conformity of the said provisions. Thereafter the respondent paid appropriate duty of excise at the prescribed rate per packing machine per month i.e. ₹ 12.50 Iakhs and paid aggregate duty of ₹ 1.50 crores on the 12 packing machines unsealed by the department and allowed to be installed. 4.6 The respondent vide his letter dated 11.04.2011 addressed the Deputy Commissioner, Central Excise Divisions, Farrukhabad, for unseating the said 12 numbers of packing machines for manufacturer of gutkha to be exported only to Afghanistan in view of the minutes of the meeting held on 22.03.2011 in the chamber of Chief Commissioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision is to be avoided so that it may not take away with one hand what the policy gives with the other. In the Union of India Vs A.V. Narasimhalu, 1983 (13) ELT 1534(SC), the Apex Court also observed that the administrative authorities should instead of relying on technicalities, act in a manner consistent with the broader concept of justice. 5. Personal hearing scheduled in this case on 09.10.2012 was attended by Shri Aman Garg, Assistant Commissioner, on behalf of the applicant who reiterated the grounds of revision application. Ms. Harsimran Kaur, advocate attended hearing on behalf of respondent and reiterated submission made in their reply dated 21.07.2012 6. The applicant department vide their fax letter f.No. IV-853/R/O/2011 dated 23.11.2012 stated that another exporter M/s Pan Parag India Ltd., Kanpur had exported Pan Masala/Gutkha sachets of Plastic upto August, 2011 and rebate claims of export upto that period were sanctioned to them. They also confirmed the fact of, realization of BRCs in these impugned cases. 7. Government has carefully gone through the relevant case records and perused the impugned Order-in-Original and Order ln-Appeat. 8. Government obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on whatsoever, the same shall be deemed to be operating packing machine for the month. Rules 6(3) of said Pan Masala Rules, 2008:- (3) The annual capacity of production .shall be calculated by application of the appropriate quantity that is deemed to be produced by use of one operating packing machine as specified in rule 5 to the number of operating packing machines in the factory during the month beginning which the capacity is being determined. Provided that in case a new manufacturer commences production of notified goods, his annual capacity of production shall be calculated pro rata on the basis of the total number of days in that year and the number of days remaining in that year starting from the date of commencement of the production of such notified goods. From perusal of above said rules, it is ample clear that rule (8) of the said Pan Masala Packing Rules, 2008 is applicable to cases where there is alteration In number of operating packing machines. In this case respondent were issued registration on 15.03.2011 and hence, are to be treated as a new manufacturer and hence, their production of Gutkha shall be specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n raised and department is discriminating against him by proposing recovery of already sanctioned claims. Matter was checked up from the applicant department who vide letter F. No. IV-853/R/O/2011 dated 23.11.2012 stated that another exporter M/s Pan Parag India Ltd., Kanpur had exported Pan Masala/Gukha in sachets of Plastic upto August 2011 and rebate claims of duty paid on exported goods was allowed upto that period. 10.3 Government notes that Trade Notice No. 20/2011 dated 20.09.2011 issued on the basis of CBEC Circular F.No.528/69/2011-STO(TI) dated 30.08.2011 clarifying distinction between sachets and carry bags, cannot have retrospective effect. The clarification issued by Chief Commissioner Lucknow was binding on the Central Excise officers and as such the rebate allowed for duty paid on exported goods at the relevant time cannot now attract the provisions of condition 3(g) of Notification No. 19/2004-CE(NT) dated 06.09.2004. 10.4 Government also notes that departmental authorities are bound by Circular/Instruction and they have to comply with the same. Hon ble Supreme Court has held in the case of Paper Products Ltd. Vs. CCE 1999(112) ELT 765(SC) that Circular/Instru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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