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M/s Trimurti fragrances (P) Ltd. Versus CCE, Kanpur

2016 (8) TMI 344 - CESTAT ALLAHABAD

Production capacity based duty - Quantum - Pan Masala - denial of pro-rata benefit of duty due to failure to pay duty in time - closure of factory for the part of month - Held that:- the issue is covered in favour of appellant in the earlier order of Tribunal in Shri Flavours Pvt. Ltd. vs. CCE Delhi-IV [2014 (4) TMI 417 - CESTAT NEW DELHI]. Therefore, by following the decision of Hon'ble Delhi High Court in the case of CCE Vs. Shakti Fragrances Pvt. Ltd. [2015 (10) TMI 1040 - DELHI HIGH COURT], .....

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Appellant: Shri Nishant Mishara, Advocate Present for the Respondent: Shri V.R. Reddy (Assistant Commissioner) A.R. ORDER The issue in this appeal is under the facts and circumstance for the month of November 2012 the Pan Masala manufacturing Unit of the appellant was lying closed since 06.10.2012 till November 18 and was in operation from November 19 to November 30, whether the appellant is required to pay the pro-rata duty for 12 working days or is liable to pay the duty for the whole month an .....

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letter dated 13.9.2012 intimated the Department that it intended to start commercial production w.e.f. 15.9.2012 and requested for unsealing of 11 machines, to manufacture Gutkha as follows:- 7 machines for manufacture of Gutkha of MRP ₹ 2.00 4 machines for manufacture of Gutkha of MRP ₹ 1.50 4. The appellant vide letter dated 25.9.2012 intimated the department that it will stop production/clearance w.e.f. 06.10.2012 and requested for sealing of the machines. 5. The Appellant paid Ce .....

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8,64,516/- was granted by the Assistant Commissioner vide Order No. 53/Abatement/CX/ACK-III/11 dated 29.11.2012, who allowed the said amount to be adjusted while discharging duty for the subsequent month/period. 7. The factory of the Appellant remained closed at the start of November 2012 (since 6.10.12). The Appellant vide letter dated 12.11.2012 informed the Assistant Commissioner that they intended to start production of Gutkha of MRP ₹ 1.00 with the aid of 6 pouch packing machines. Gut .....

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for 12 days ( 19.11.2012 to 30.11.2012). The Appellant therefore adjusted Rs, 1,17,60,000/- from the Abatement of ₹ 3,08,64,516/- sanctioned to it earlier vide Order 29.11.2012 by the Assistant Commissioner. After adjustment amount of ₹ 1,91,04,516/- remained from the abated amount. The Appellant informed the Department of the payment by way of adjustment and submitted Form-2 on 06.12.2012. 11. On perusal of ER-I Return filed by the Appellant for the month of November, 2012, the Dep .....

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achines packing Gutkha of MRP ₹ 1 is concerned, since the Appellant has started manufacturing Gutkha on a new MRP in the middle of the month (earlier MRP ₹ 1.50 was manufactured), it was liable to pay duty on a pro rata basis by the 5th of the succeeding month which was correctly paid by the appellant, but in respect of pouch packing machines manufacturing Guthka of MRP ₹ 2.00, the Appellant was manufacturing Gutkha of the same MRP and was liable to pay duty of ₹ 180 lakh .....

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ting to ₹ 1,08,00,000/- (Rupees one crore eight lakhs only) should not be demanded and recovered from them under Section 11A of the Central Excise Act 1944 read with Rule 9 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008 and Notification No. 42/2008 -CE dated 1.7.2008 as amended in respect of production/clearance effected by them for Gutkha during the month of November 2012 b) The interest leviable thereon should not be demanded from them under .....

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er Rule 27 of the Central Excise Rules 2002 for contravening the provisions of Rule 12 of the Central Excise Rules 2002 read with Rule 9 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008 14. The show cause notice was adjudicated by the Commissioner vide Order-in-Original dated 29/9/2014 conforming the proposed duty along with interest and equal amount of penalty under Rule 17 of Pan Masala P.M. Rules read with section 11 AC of the Act. Further penalty .....

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e Ld. Commissioner have totally misconceived the provision for Pan Masala P.M. Rules, 2008. Under the provision Rules 9 read with Rule 7 of Pan Masala P.M. Rule, 2008 provides that the duty of particular month has to be calculated, to the rate with the number of operating Pan Masala P.M. in the factory during the month. There is no dispute out of 11 Packing Machines, 6 of the Packing Machine had been used for packing of Pouches with MRP ₹ 1 and 5 Machine were operated for packing of pouche .....

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ring of goods of a new retail sale price during the month), the monthly duty payable shall be recalculated (pro-rate on the basis of the total number of days in that month and the number of days remaining in that month counting from the date of such discontinuation) or commencement and the duty liability for the month shall not be discharged unless the differential duty is paid by the 5th day of the following month and in case the amount of duty so recalculated is less than the duty paid for the .....

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ws - "Provided that where a factory producing notified goods did not produce the notified goods during any continuous period of 15 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. 15.3 Further Rule 10 of P.M. P.M. Rules provides for abatement without prescribing that order of abatement will be passed by the Revenue, as both sealing and unsealing of Packing Mach .....

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pugned order. 17. Having considered the rival contentions we find that the issue herein is covered in favour of appellant in the earlier order of the Tribunal in Shri Flavours (supra) on all fours. Further Hon'ble Delhi High Court have held in CCE Vs. Shakti Fragrances Pvt. Ltd. reported in 2015 (324) E.L.T. 390 have held as follows - In the present case, the appellant had pressed into service Rule 10 of the PMPM Rules requires the duty calculated on a proportional basis to be abated in case .....

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