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TMI Blog2015 (11) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... g Machines (Capacity Determination and Collection of Duty) Rules, 2008 by comparing it to Rule 96ZQ of Central Excise Rules? 2. The facts stated briefly are that the respondent - assessee holds Central Excise Registration Certificate and is engaged in the manufacture of Pan Masala and Pan Masala containing tobacco commonly known as Gutkha falling under Chapter 2106-9020 and 2403-9990 respectively, of the First Schedule to the Central Excise Tariff Act, 1985 which is brought under the Compounded Levy Scheme with effect from 1st July, 2008 as per the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 (hereinafter referred to as "the PMPM Rules") notified vide Notification dated 1st July, 2008. 3. The respondent assessee vide letter dated 24th February, 2011 intimated the Assistant Commissioner, Central Excise, Division IV, Ahmedabad-II that they had run machines as indicated therein during the month of March, 2011. The assessee by a letter dated 7th March, 2011 informed the Assistant Commissioner that they had paid duty to the tune of Rs. 238 lakhs for the month of March. Subsequently, vide letters dated 1st March, 2011 and 15th March, 2011, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ior standing counsel for the appellant invited the attention of the court to the provisions of rule 10 of the PMPM Rules to submit that while rule 10 provides for abatement in case of non-production of notified goods for the period stipulated therein, the assessee cannot, on his own, calculate the duty and set off the same against the duty payable under rule 9 in the next month. It was submitted that the Central Board of Excise and Customs has equated abatement with refund and has accordingly, by the circular dated 12th March, 2009 provided that since abatement is in the nature of refund, abatement orders are also required to be subjected to the same administrative procedure of pre and post audit as laid down by the Board from time to time regarding refund. It was pointed out that sub-section (3) of section 3A of the Act provides for abatement and that since no provision has been made in the PMPM Rules laying down the procedure for grant of abatement, the procedure as per the circular has to be followed. It was submitted that the interpretation given by the Department vide the circular dated 12th March, 2009 should be given due weightage as it gives the correct interpretation of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals involve interpretation of the said rules, the matter requires consideration and that the appeals deserve to be admitted on the questions of law as proposed or as may be deemed fit by this court. 5. Vehemently opposing the appeals, Mr. Paresh Dave, learned counsel for the respondent assessee submitted that the submissions advanced by the learned counsel for the appellant based on the circular dated 12th March, 2009 are without any basis. It was contended that the circular nowhere provides that there has to be an order of abatement nor does it provides for any procedure to be followed by the manufacturer. The circular only provides for pre and post audit and does not lay down any procedure for granting abatement. It was submitted that the sole question that arises for consideration is as to whether any order of the Assistant Commissioner or Deputy Commissioner is required for the purpose of availing the benefit of abatement. It was contended that whenever any procedure is required to be followed for grant of abatement, specific rules have been made. In this regard the attention of the court was drawn to the fact that while rules 96ZO, 96ZQ and 96ZP of the Central Excise Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed. The proviso thereto provides that where a factory producing notified goods does 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 if the manufacturer of such goods fulfils such conditions as may be prescribed. Thus, sub-rule (3) provides for the rate of duty and the manner in which such duty is to be collected and the proviso thereto provides for abatement of duty on a proportionate basis if the factory producing notified goods does not produce notified goods for a continuous period of fifteen days or more. Therefore, the proviso limits the collection of duty to the extent specified therein. 7. In exercise of powers conferred by sub-sections (2) and (3) of section 3A of the Act, the Central Government has framed rules called the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008. Rule 7 of the PMPM Rules provides for calculation of duty payable and lays down that duty payable for a particular month shall be calculated by application of the appropriate rate of duty specified in the notification of the Government of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chines would be opened under the physical supervision of Superintendent of Central Excise. 9. The facts of the case are required to be examined in the light of the above statutory provisions. From the facts noted hereinabove, it is apparent that the assessee did not produce the notified goods during a continuous period of fifteen days in the month of March and accordingly claimed that it was entitled to abatement of duty on a proportionate basis for the period when the factory was not producing notified goods and accordingly adjusted duty to that extent from the duty payable in the month of April. The contention of the revenue is that abatement amounts to refund and, therefore, the procedure for availing refund as laid down under section 11B of the Act is required to be followed. In this regard, it may be noted that the expression "abatement" has not been defined anywhere in the Act or in the PMPM Rules. Therefore, the popular or dictionary meaning of the said expression is required to be looked into. In Black's Law Dictionary, the term "abatement" has been defined as a reduction, a decrease, or a diminution; the suspension or cessation, in whole or in part, of a continuing charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10. Since great emphasis has been laid on the circular dated 12th March, 2009 on behalf of the appellant for contending that the principle of contemporanea expositio guides that contemporaneous administrative construction should be given considerable weight and should not be lightly overturned, it may be apposite to examine the nature of the said circular. A perusal of the circular dated 12th March, 2009 shows that the subject of such circular is "Pre and post audit of abatement orders in terms of rule 10 of the Pan Masala Packing Machine Rules, 2008 - clarification regarding". A perusal of the contents of the said circular shows that the same says that in terms of rule 10 of the PMPM Rules, the abatement of duty is to be given in case the factory did not produce notified goods during any continuous period of fifteen days or more. The JDA/JAC has to pass an abatement order in the case. The circular further says that representations have been received from field formations regarding whether the abatement orders need to be subjected to pre and post audit in the same manner as refund/rebate orders. Thus, the subject matter of the said circular is as to whether abatement orders need ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 96ZO of the Central Excise Rules is concerned, sub-rule (2) thereof expressly provides for claim of abatement being made under sub-section (3) of section 3A of the Act, which would be allowed by an order passed by the Commissioner of Central Excise of such amount as may be specified in such order. Similarly, sub-rule (7) of rule 96ZQ provides for abatement being allowed by an order passed by the Commissioner of Central Excise of such amount as may be specified in such order, subject to the conditions enumerated thereunder. Similarly, sub-rule (2) of rule 96ZP provides for abatement being allowed by an order passed by a Commissioner of Central Excise of such amount as may be specified in such order subject to the fulfillment of the conditions laid down thereunder. Thus, in relation to independent processors of textile fabrics, manufacturers of non-alloy steel hot re-rolled products and manufacturers of non-alloy steel ingots, who were also assessed on the basis of annual production capacity under section 3A of the Act, there was an express provision for making an order of abatement whereas the PMPM Rules are totally silent in that regard. There is no provision for making an order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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