TMI Blog2015 (4) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... Applied Mechanical Department and Professor Shri S. Mukherjee of Mechanical Engineering Department of IIT, Delhi. This report also clearly classifies the machine, in question, as a single track duplex machine. In our view there is absolutely no basis for the Commissioner s finding that it is a multiple track machine. Just because the speed of this machine is much higher than the normal machines, it cannot be treated as a multiple track machine. The difference between the simplex and the duplex machine is in the speed multiple track or and in terms of the Board s Circular No. 980/4/14-CX dated 24/1/14 in case of a manufacturer operating machine at a higher speed as a result of which the actual production is more than the deemed production, as mentioned in Rule 5 of the PMPM Rules, no differential duty is to be demanded. When the PMPM Rules do not distinguish between the simplex FFS machine and the duplex FFS machines, though there is considerable difference between their speeds, and there is no provision that duplex is to be treated as two machines, Rule 5 of PMPM Rules and the Notification No. 42/08-CE cannot be interpreted to treat such a machine as two machines. - It is only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany were discharging duty liability in respect of pan masala retail pouches being manufactured by them in terms of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 (hereinafter referred to as PMPM Rules). In November 2008, the appellant purchased a packing machine of model PK-90 GMP FFS machine from PKIL, Vadodara under their invoice dated 26/10/08 and the machinery was received in the factory of the appellant company on 01/11/08. On 03/11/08 the appellant company filed an intimation to the Jurisdictional Deputy Commissioner as per the requirement of Rule 13 (2) of the PMPM Rules. The packing machine was physically verified and sealed on 07/11/08 in an uninstalled condition. On 17/11/08 and 19/11/08, the appellant company intimated the Jurisdictional Deputy Commissioner, Central Excise that they intend to operate the newly acquired packing machine w.e.f. 20/11/08 and accordingly they also filed a revised declaration under Rule 6 in Form I in terms of Rule 6 of the PMPM Rules, wherein the relevant particulars of the newly added machine and also the MRP of the pouches etc. were mentioned. In this form, the machine was declared as a single trac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er minute while the simplex model of this machine produced upto 80 pouches per minute. According to the Department, as per the technical specifications of the supplier PKIL, Vadodara, the machine appeared to be a double track machine which in terms of provision of Rule 5 of the PMPM Rules and of the Notification No. 42/08-CE dated 01/7/08 has to be treated as two machines. It, therefore, appeared that the appellant have evaded duty in respect of the pan masala pouches produced on this machine during period w.e.f. November 2008 by mis-declaring the machine as single track machine in form-I declaration filed by them. Accordingly a show cause notice dated 30/7/10 was issued to the appellant company for demand of duty of ₹ 25,98,69,504/- from them in respect of clearances of 18 gm. pan masala pouches during period from November 2008 to July 2010 alongwith interest thereon under Section 11AB and also for imposition of penalty on the appellant company under Rule 17 of the PMPM Rules. Subsequently, another show cause notice dated 15/7/11 was issued to Shri Rajiv Kumar, CMD of appellant company, Shri Chiranjiv Roy Choudhory, Senior Vice President to the appellant company, Shri J.D. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sides the packing the notified goods, performs additional processes involving moulding and giving a definite shape to such pouches with a view to distinguish the brand or prevent the counterfeiting of the goods, that since no definition of the term multiple track or multiple line packing machine has been given, this term should be construed as it is understood in common parlance, that in multiple track machines there are more than one line or track for production of retail pouches while in single track machine there is only one such line of production of pouches, that the machine, in question, is a single track duplex machine in the sense that only single laminate is fed into the machine alongwith zip and two pouches are produced at a time and as such it is a single track machine with higher speed, that in view of this, for the purpose of Rule 5 of the PMPM Rules and Notification No. 42/08-CE dated 01/7/08, the machine, in question, has to be treated as single track/single line machine, not a two track or two line machine, that just because the speed of production is higher almost two times the speed of simplex model of same machine, it cannot be treated as two track machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is absolutely no justification for imposition of penalty under Rule 26 on Shri R.J. Shah, Director of the machinery supplier PKIL, Vadodara or on Shri Rajiv Kumar, Managing Director, Shri Chiranjiv Roy Choudhory, Senior Vice President, Shri J.D. Desai, Vice President, Shri Naresh Dhir, General Manager (Procurement) and Shri Amit Singhal, General Manager (Legal Excise). He emphasised that the machine, in question, is duplex model of a single track/single line FFS machine whose speed of production is higher than the similar machines of the simplex model and the same cannot be treated as a multi track or multi line machine. He, therefore, pleaded that the impugned order is not sustainable. 4. Shri Yashpal Sharma, the learned DR, defended the impugned order by reiterating the findings of the Commissioner and emphasised that since admittedly the speed of production of the machine, in question, is almost twice the machine of the similar machine of the simplex model, the same has to be treated as two track machine and the duty has to be charged accordingly. He, therefore, pleaded that there is no infirmity in the impugned order. 5. We have considered the submissions from bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eemed production for various RSP slabs has been specified keeping in view the average speed of the machine and the average number of working hours in a day and average number of working days in a month. Having specified the deemed production per machine per month for the pouches of different RSP slabs, the assessment of duty has not been left to the assessing officers. Instead, Notification No. 42/08-CE dated 01/7/08 issued under Section 3A (4) of the Act specifies the total rate of duty per machine per month for different RSP slabs and this duty includes in addition to the duty leviable under Section 3(1) of Central Excise Act, 1944 the additional duty of excise leviable under Section 85 of the Finance Act, 2005, National Calamity Contingent Duty leviable under Section 136 of the Finance Act, 2001, education Cess leviable under Section 91 of the Finance Act, 2004 and Secondary and higher education cess leviable under Section 136 of the Finance Act, 2007. 7. Thus, the duty per machine per month payable by an assessee has been specified under Notification No. 42/08-CE for different RSP slabs and for this purpose in case of multiple line/multiple track machine, where the multiple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hine. Just because the speed of this machine is much higher than the normal machines, it cannot be treated as a multiple track machine. 10. The Rule 5 of the PMPM Rules and Notification No. 42/08-CE dated 01/7/08 distinguish only between the single track and multiple track machines and in a multiple track machine, in certain conditions, each track is to be treated as a separate machine. Since the PMPM Rules or Notification No. 42/08-CE do not define the term multiple track or multiple line machines, these terms are to be construed in the sense in which the same are understood in trade parlance and accordingly the multiple track or multiple line machines are those in which there are more than one path traced by the pouches, as they are formed and later filled and all the pouches in the same track follow the same path. This feature is not there in the machine, in question, which is duplex model of PK-90 GMP machine, as against its Simplex model. Neither the PMPM Rules nor the Notification No. 42/08-CE make a distinction between the simplex and duplex machine. The difference between the simplex and the duplex machine is in the speed multiple track or and in terms of the B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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