TMI Blog2015 (11) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... action of the respondent assessee in computing the proportionate amount of duty towards the abatement and setting it off against the duty payable in the next month does not adversely affect the revenue in any manner. The abatement, in the opinion of this court, is not akin to refund and means reduction or diminution of the duty. Therefore, when the duty stands reduced to the extent provided in the rule, there is no liability to pay the same, inasmuch as, to that extent the duty stands abated. Therefore, if the assessee has correctly calculated the proportion of duty and set off the same against the duty payable for the next month, it cannot be said that the said action is contrary to the statutory scheme. When the rules do not provide for the manner in which duty is required to be abated, nor do they provide that abatement shall be by an order of the Commissioner or any authority, but nonetheless provide for abatement of duty and the extent of entitlement to such abatement, no fault can be found in the approach of the assessee in suo motu taking the benefit of such abatement. - it cannot be said that the view adopted by the Tribunal is not a plausible view warranting interferen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Subsequently, vide letters dated 1st March, 2011 and 15th March, 2011, the assessee informed the Jurisdictional Assistant Commissioner that the machines were working from 1st March, 2011 to 4th March, 2011 and from 20th March, 2011 to 31st March, 2011, that is, for a total period of sixteen days whereas the machines were sealed for fifteen days in the month of March. It was noticed that the assessee, as per the machines run by it in the month of April, 2011, was liable to pay duty of ₹ 395 lakhs, however, for the month of April, 2011, the assessee had made payment of ₹ 2,79,83,873/- with a remark that payment was made in March, 2011 in Form No.2 for April, 2011. The Department was accordingly of the view that the assessee had short-paid duty for the month of April, 2011 to the tune of ₹ 1,15,16,127/-. The assessee by a letter dated 6th April, 2011 claimed abatement of ₹ 1,15,16.128/- for the month of March, 2011 in April, 2011. According to the Department, in terms of the instruction of the Board dated 12th March, 2009, an abatement order has to be passed by the Jurisdictional Assistant Commissioner/Jurisdictional Deputy Commissioner, Central Excise, howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar dated 12th March, 2009 should be given due weightage as it gives the correct interpretation of law and should not be brushed aside lightly. It was submitted that the principle of contemporanea expositio guides that contemporaneous administrative construction should be given considerable weightage and should not be lightly overturned. It was submitted that the dictionary meaning of the expression abatement does not carry the case any further, inasmuch as, even if the meaning assigned to it is reduction of duty, even then, what is reduced has to be determined. 4.1 Referring to rule 9 of the PMPM Rules, it was contended that the rule is unambiguous and provides for making payment of duty on the 5th day of the month failing which liability starts and interest also has to be paid and that the legislature has not provided for less payment of duty in the next month. It was, accordingly, urged that rule 10 of the PMPM Rules does not absolve the assessee from payment of duty on the 5th of the month as provided by rule 9 and that there is no provision in the PMPM Rules for payment of proportionate amount of duty. According to the learned counsel, if there was an intention to provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attention of the court was drawn to the fact that while rules 96ZO, 96ZQ and 96ZP of the Central Excise Rules, 1944 specifically made provision for an order of abatement to be made, the PMPM Rules are totally silent in that regard, which shows that the legislature has consciously omitted to make any such provision. It was submitted that the circular, therefore, does not supplement any omission in the rules. Referring to the proviso to section 3A(3) of the Act, it was submitted that the same is applicable to all compounded levy schemes. Referring to the 6th proviso to rule 9 of the PMPM Rules, it was pointed out that whenever the legislature has thought it fit to provide for refund, an express provision has been made in that regard. It was emphatically argued that abatement is not akin to refund and flows from the 1st proviso to section 3A(3) of the Act. It was submitted that if the legislature wanted the assessee to claim refund, it would have used the word refund instead of abatement . It was argued that a plain reading of rule 10 shows that it does not lay down any condition to apply for abatement. According to the learned counsel insofar as the implementation of the circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alculated by application of the appropriate rate of duty specified in the notification of the Government of India dated 1st July, 2008 to the number of operating packing machines in the factory during the month. Under rule 9 of the PMPM Rules, the monthly duty payable on the notified goods is required to be paid by the 5th day of the same month. Therefore, the duty is payable in advance before the goods are actually manufactured. Thus, under the PMPM Rules, the assessee is required to calculate the duty payable each month in terms of the notification of the Government and pay the duty payable for each month on the 5th day of that month. However, when the factory does not produce notified goods for a continuous period of fifteen days or more, rule 10 of the PMPM Rules provides for abatement of duty for the period during which the factory was not producing such notified goods. 8. The controversy involved in the present case centers around the interpretation of rule 10 of the PMPM Rules, which reads thus: RULE 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 cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efined as a reduction, a decrease, or a diminution; the suspension or cessation, in whole or in part, of a continuing charge, such as rent. In the context of tax, abatement has been stated to be diminution or decrease in the amount of tax imposed. In the New Oxford Dictionary of English, abatement has been defined as the ending, reduction or lessening of something. In the Dictionary of English Language, abatement has been defined as an amount abated, a deduction from the full amount of tax. On the other hand, refund has been defined as to pay back money to give or to put back. Tax abatement is ordinarily known as reduction of or exemption from tax by a Government for a specific period. A tax incentive is also stated to be a form of tax abatement. Thus, the ordinary meaning of abatement is reduction, diminution and, therefore, when an assessee is entitled to abatement of duty, he is entitled to reduction of duty to that extent and not refund thereof as is sought to be contended on behalf of the revenue. It would have been a different matter if the rules prescribed for the manner in which abatement has to be granted. However, in the absence of any rule in this regard or any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same manner as refund/rebate orders. Thus, the subject matter of the said circular is as to whether abatement orders need to be subjected to pre and post audit. The circular further says that circulars have been issued in the context of procedure to sanction pre/post audit of refund/rebate claims and as the abatement order is in the nature of refund, they are 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. Accordingly, it has been provided that all Board circulars issued in the context of pre and post audit of refund/rebate claims will apply mutatis mutandis to the abatement orders also. 11. Thus, the said circular proceeds on the footing that abatement orders are to be passed by the JDC/JAC and accordingly provides for application of circulars issued in the context of pre and post audit in relation to refund/rebate claims to abatement orders. However, the said circular nowhere provides for the procedure to be followed for granting abatement. As noticed earlier, the Act and the PMPM Rules are totally silent as regards the manner in which the abatement is to be granted and do no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r making an order of abatement whereas the PMPM Rules are totally silent in that regard. There is no provision for making an order of abatement under rule 10 of the PMPM Rules. 13. As noticed earlier, rule 10 of the PMPM Rules provides for abatement of duty calculated on proportionate basis in case where the factory does not produce notified goods during any continuous period of fifteen days or more. However, such abatement is subject to the conditions stipulated thereunder as referred to hereinabove. Once such conditions are satisfied, the assessee becomes entitled to abatement of duty to the extent of the days the factory did not produce the notified goods. 14. On a plain reading of rule 10 of the PMPM Rules, it is apparent that while the same provides that duty calculated on a proportionate basis shall be abated, it does not provide for any procedure for doing so. Thus, whereas rules 96ZQ, 96ZO and 96ZP of the Central Excise Rules, 1944, which also are schemes under the compounded levy scheme, there were express provisions for making an order of abatement by the Commissioner, rule 10 of the PMPM Rules is wholly silent in that regard. Under the circumstances, having regard ..... X X X X Extracts X X X X X X X X Extracts X X X X
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