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2015 (6) TMI 540 - CESTAT NEW DELHI

2015 (6) TMI 540 - CESTAT NEW DELHI - TMI - Abatement under Rule 10 of the PMPM Rules - Gutkha, Pan Masala and/Chewing Tobacco. - whether for claiming the abatement, the appellant should first pay the duty for the whole month by 5th March 2013 and should have thereafter claimed the abatement - Held that:- Department does not dispute that the appellant would be eligible for abatement under Rule 10 of the PMPM Rules for the period of closure from 1st March 2011 to 16th March 2011 - Tribunal held t .....

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There were a total number of 21 packing machines out of which 13 machines were installed for packing of Pan Masala pouches of MRP ₹ 1 and 8 machines installed were for packing of Chewing Tobacco of MRP ₹ 1. W.e.f 24.07.2013 four new machines were installed which were used for packing of Pan Masala pouches of MRP of ₹ 4. - In terms of Rule 8 of the PMPM Rules in case of addition or installation or removal or un-installation of a packing machine in the factory during a .....

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t for a particular month shall be calculated by application of the appropriated rate of duty specified in the notification no. 42/08-CE to the number of "operating packing machines" in the factory during the month.

Since the appellant had installed the 4 new machines on 24.07.2013 for manufacture of the new RSP of ₹ 4 per pouch in our prima facie view, the 4th Proviso to Rule 9 would be applicable. Therefore, we are of prima facie view that in respect of 4 new machines, the dut .....

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-2015 - Rakesh Kumar, Member (T) And S K Mohanty, Member (J),JJ. For the Appellant : Ms Seema Jain, Adv. For the Respondent : Mr MS Negi, DR ORDER Per Rakesh Kumar (for the Bench): The appellant are manufacturer of retail pouches of Gutkha, Pan Masala and/Chewing Tobacco. They discharged their duty liability under Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008 (hereinafter referred to as the PMPM Rules) and chewing tobacco and manufactured Tobacco packing .....

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spect of a month by 5th of that month and accordingly, the duty liability for the month of March 2011, was required to be discharged by 5th March 2011. Since, the unit was closed from 01.03.2015 to 16.03.2015, the duty was paid by the appellant on 21.03.2015 and the duty paid was only the proportionate duty for the number of days for which the unit functioned i.e. from 16.03.2011 to 31.03.2011. The Department was of the view that the appellant should have first paid the duty for the whole month .....

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of Pan Masala. In respect of Pan Masala the duty was being paid under PMPM Rules. 2008 and in respect of Chewing Tobacco, the duty was being paid under the CTUTPM Rules. The retail pouches of Pan Masala as well as of the Chewing Tobacco were of the MRP of ₹ 1 per pouch. On 24.07.2013, 4 new machines were added, which were used for manufacture of the Pan Masala pouches of MRP of ₹ 4 per pouch for which the necessary declaration was filed. The point of dispute is as to whether in respe .....

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8377; 4, the duty would be payable for the entire month. The duty demand of ₹ 1,51,35,483/- is on this basis. 1.3 The matter was adjudicated by the Commissioner vide order-in-original dated 29.04.2014 by which the duty demand of ₹ 1,83,61,288/- was confirmed against the appellant along with interest and beside this while penalty of ₹ 91,80,644/- was imposed on the appellant company under Rule 17 of the PMPM Rules 2008, penalty of ₹ 9 Lakh each was imposed on Sh. Pradeep K .....

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he duty for the entire month by the due date and thereafter claim abatement for the period of closure from first March 2011 to 16th March 2011 or whether the appellant could pay duty on prorata basis only for the number of days for which the factory was functioning, the issue stands decided in the appellant's favour by the Tribunal's final order no. 50223-50232/2015 dated 21.01.2015 wherein the Tribunal relying upon the judgment of Hon'ble Allahabad High Court in the case of Steel In .....

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dition and in such cases the duty would be required to be paid only for the number of days for which the factory was working, that as regards, the second point of dispute relating to July 2013, the appellant during 1st July to 23rd July had installed a total of 21 machines 13 machines for manufacture of Pan Masala pouches of MRP of ₹ 1 and 8 machines for manufacture of Chewing Tobacco Retail pouches of MRP of ₹ 1, that w.e.f from 24.07.2013, 4 new machines were installed for manufact .....

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s remaining in that month counting from the date of commencement and in case, the amount of duty is recalculated is less than the duty paid for the month, the balance shall be refunded to the manufacturer by the 20th day of the following month, that the 4th proviso to Rule 9 of the PMPM Rules is applicable to the new machines, as these machines were used for packing of the Pan Masala pouches of a new MRP, that there is no justification for demanding duty in respect of these new 4 machines for th .....

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ing the findings of the Commissioner in the impugned order. 5. We have considered the submissions from both the sides and perused the records. 6. As regards, the dispute for the month of March 2011, in respect of which the duty demand confirmed is ₹ 32,25,805, there is no dispute that the unit was closed from 1st March 2011 to 16th March 2011 and had functioned only from 17.03.2011 to 31.03.2011. The Department does not dispute that the appellant would be eligible for abatement under Rule .....

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is not necessary that the assessee should pay duty for the whole month and that the assessee would be required to pay proportionate duty only for the number of days for which the unit were functioning. Therefore, so far as the duty demand of ₹ 32,25,805/- is concerned, the same is prima facie not sustainable. 7. As regards, the second point of dispute with regard to July 2013, there is no dispute that from 01.07.2013 to 23.07.2013 there were a total number of 21 packing machines out of wh .....

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4 new machines only proportionate duty would be chargeable for the period from 24.07.2013 to 31.07.2013. 7.1 In terms of Rule 8 of the PMPM Rules in case of addition or installation or removal or un-installation of a packing machine in the factory during a month, the number of operating packing machines for that month shall be taken as maximum number of packing machines installed on any day during the month. Thus, in terms of Rule 8, if the number of packing machines installed in a factory, dur .....

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