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M/s. M.S.S. Food Processors Amarchand Upadhyay Versus CCE & ST, Indore

Valuation - pan masala - duty liability of the appellant is fixed as per the number of packing machines operated during a particular month - Revenue entertained a view that irrespective of the closure of the unit and sealing of the machines, for more than 15 days in a month, the appellant /assessee is liable to pay full duty liability for all the machines by 5th of the given month and thereafter, obtain abatement of duty for closed period, from the jurisdictional officer - Held that: - The appel .....

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at the appellant have to first pay full duty liability for the all days, as determined by the jurisdictional officers and thereafter, after the end of the month, ascertaining the number of days closed, they should claim the excess paid amount, as abatement from the Department. No such procedure has been laid down in the said rules. - Reliance also placed in the case of The Commissioner Versus M/s Thakkar Tobacco Products P. Ltd. [2015 (11)319 - GUJARAT HIGH COURT], where it was held that whe .....

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e Appeals Nos.50554 and 50555/2017-EX (DB) - A/53639-53640/2017-EX[DB] - Dated:- 2-6-2017 - Shri Anil Choudhary, Member (Judicial) And Shri B. Ravichandran, Member (Technical) Shri S. Sunil and Anil Mishra, Advocates for the appellant Shri M.R. Sharma, DR for the respondent ORDER Per: B. Ravichandran These two appeals are against common impugned order dated 30.12.2016 of Commissioner of Central Excise, Indore. The main appellant - M/s. MSS Food Processors are engaged in the manufacture of Pan Ma .....

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ll period of the month. They have, under due intimation, closed the operations and sealed the machines for periods in excess of 15 days. The dispute in the present appeals relates to the liability of the appellant to discharge full duty liability, in terms of the capacity fixation and duty liability as determined, by 5th of the given month. The Revenue entertained a view that irrespective of the closure of the unit and sealing of the machines, for more than 15 days in a month, the appellant /ass .....

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l the machines for the full month and thereafter claiming abatement from the Department. It is contended by the appellant/assessee that no such procedure has been prescribed by the said Rules. However, the appellant/assessee admits that wherever they could not discharge the duty by 5th of any given month, the interest liability has to be discharged by them till the actual date of payment of said duty. They are not contesting the liability on interest. 2. With the above background, proceedings we .....

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that during the impugned periods, the appellants manufacturing unit was closed intermediately with the due intimation to the jurisdictional officer. The appellants followed the procedure laid down in the said rules for sealing of the machines and de-sealing thereafter. Relying upon the various decided cases and the provisions of Rule 9 and 10 of the said Rules read with Section 3A(3) of the Central Excise Act, 1944, the ld. Counsel submitted that the impugned order is not legally tenable. There .....

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of Rule 10. 5. We have heard both the sides and perused the appeal records. 6. First of all, we note that the similar dispute came before this Tribunal as well as before the Hon ble High Courts for determination. Admittedly, the appellant/assessee is covered by the provisions of 2008 Rules for payment of central excise duty. The duty payable by appellant/assessee has also been accordingly determined based on their capacity. These facts are not in dispute. The appellant/assessee closed the opera .....

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r more, the duty calculated on a proportionate basis shall be abated in respect of such period provided the manufacturer of such goods files an intimation to this effect with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise, at least three working days prior to the commencement of said period, who on receipt of such intimation shall direct for sealing of all the packing machines avai .....

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d period: Provided further that when the manufacturer intends to restart his production of notified goods, he shall inform to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, of the date from which he would restart production, whereupon the seal fixed on packing machines would be opened under the physical supervision of Superintendent of Central Excise. 7. Rule 9 talks about manner of payment of duty and interest. The provisions are a .....

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iable to pay the outstanding amount along with the interest at the rate specified by the Central Government vide notification under section 11AB of the Act on the outstanding amount, for the period starting with the first day after due date till the date of actual payment of the outstanding amount: Provided also that in case of increase in the number of operating packing machines in the factory during the month on account of addition or installation of packing machines, the differential duty amo .....

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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 month, the balance shall be refunded to the manufacturer by the 20th day of the following month: Provided also that if there is revision in the rate of duty, the monthly duty payable shall be recalculated pro-rata on the basis of the total number of days in that month and the number of days re .....

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ot been declared by him in accordance with provisions of these rules or has manufactured goods in contravention of his declaration regarding the plan or details of the part or section of the factory premises intended to be used by him for manufacture of notified goods of different retail sale prices and the number of machines intended to be used by him in each of such part or section, the rate of duty applicable to goods of highest retail sale price so manufactured by him shall be payable in res .....

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his premises at any time thereafter, whichever is higher: Provided also that in case a new manufacturer commences production of notified goods in a particular month, his monthly duty payable for that month shall be calculated pro-rata on the basis of the total number of days in the month and the number of days remaining in that month starting from the date of commencement of the production of such notified goods and shall be paid within five days of such commencement. 8. Admittedly, the appellan .....

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umber of days for which the unit operated and also their exact duty liability on prorata basis. This duty liability was discharged subsequently in the next month. This will necessarily bring the liability for interest, which is admitted by the appellant also. We are not able to accept the view of the Revenue that the appellant have to first pay full duty liability for the all days, as determined by the jurisdictional officers and thereafter, after the end of the month, ascertaining the number of .....

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2015 (325) ELT 390 (Delhi), Shree Flavours Pvt. Ltd. - 2014 (304) ELT 441 and Jayaswals Neco Ltd. - 2006 (195) ELT 142. 10. The Hon ble Gujarat High Court in the case of Thakkar Tobacco Products Pvt. Ltd. (supra), examining the provisions of Rule 10 observed as below: 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 Rule .....

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consciously omitted making such provision. Therefore, in the absence of any specific provision for making an order of abatement, it cannot be said that the action of the assessee in calculating the duty on a proportionate basis and setting off the same against the duty payable in the succeeding month is, in any manner, violative of the rules or the statutory scheme. 15. Besides, in the light of the findings recorded by the Tribunal to the effect that it is not disputed that the adjustments made .....

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e 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 n .....

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view that the failure to make the payment of duty on fifth day of every month cannot result in depriving the assessee of the pro rata abatement of duty which he is in any way entitled to since admittedly in the present case there has been a closure of the factory from 14th to 31st August, 2012 and an abatement order has also been passed on 28th August, 2012. However, the assessee would be liable to pay the interest for the period of late deposit of duty. 12. The ratio of these decisions have bee .....

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