TMI Blog2017 (12) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... attract, if at all, the provisions of Rule 17 of 2008 Rules or Rule 18 of the Chewing Tobacco Rules, 2010, for penalty. Appeal allowed - decided in favor of appellant. - Excise Appeals No.52235-52236 of 2014 - A/57359-57360/2017-EX[DB] - Dated:- 25-10-2017 - Shri Dr. Satish Chandra, President And Shri B. Ravichandran, Member (Technical) Shri O.P. Agarwal, C.A. - for the appellant. Shri M.R. Sharma, Authorized Representative (DR) for the Respondent. ORDER Per: B. Ravichandran These two appeals are on identical issues but for different periods and are accordingly taken up together for disposal. The appellants were engaged in the manufacture Pan Masala and Chewing Tobacco and were paying Central Excise duty in terms of Pan Masala Packing Machines (Capacity Determination and Collection of Duty), Rules 2008 and Chewing Tobacco Packing Machines Rules, 2010. The excise duty liability of the appellant is in terms of Section 3A of the Central Excise Act, 1944 readwith these rules, under compounded levy scheme based on production capacity of machines installed by the appellant. The issue involved in both the appeals is rejection of the claims of abate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relates to the entitlement of the appellant for abatement of excise duty when the manufacturing unit/machines were closed and sealed for continuous period of 15 days or more. The facts of the case that the machines were sealed by the Jurisdictional officers as per the request of the appellant and they remained sealed during the impugned periods is not in dispute. It is also not the case of the Revenue that any notified goods were manufactured during these periods. In terms of proviso to Rule 10 they should have cleared already manufactured notified goods within two days of sealing of their machines. They failed to do so resulting in the rejection of these abatement claims. 5. In this connection, it is relevant to examine the statutory provision. Section 3A is as below :- SECTION [3A. Power of Central Government to charge excise duty on the basis of capacity of production in respect of notified goods. - (1) Notwithstanding anything contained in section 3, where the Central Government, having regard to the nature of the process of manufacture or production of excisable goods of any specified description, the extent of evasion of duty in regard to such goods or such othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced or manufactured, by a hundred per cent. export-oriented undertaking and brought to any other place in India. Explanation 1 . - For the removal of doubts, it is hereby clarified that for the purposes of section 3 of the Customs Tariff Act, 1975 (51 of 1975), the duty of excise leviable on the notified goods shall be deemed to be the duty of excise leviable on such goods under the [Fourth Schedule], read with any notification for the time being in force. Explanation 2. - For the purposes of this section, the expression hundred per cent. export-oriented undertaking shall have the meaning assigned to it in section 3.] [Explanation 3. - For the purposes of sub-sections (2) and (3), the word factor includes factors .] 6. Rule 10 of Pan Masala Rules, 2008 is as below :- 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 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 Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds even during the closure period which will otherwise entitle abatement. Section 3A is a charging section which stipulates how the Central Government can proceed to levy and collect excise duty on certain notified goods. The said section itself provides that during the period of non-production of notified goods proportionate abatement of duty shall be provided. In other words production is essential for excise levy. When all the machines involved in production or sealed by the Departmental officers, there is no question of production of notified goods. Accordingly, the abatement is an entitlement of the appellant. 8. We note the Hon ble Rajasthan High Court in CCE, Jaipur II Vs. Jupiter Industries 2006 (206) E.L.T. 1195 (Raj.) while examining a compounded levy scheme in respect of stainless pattas which is also charged under Section 3A recorded as below :- 23. It goes without saying that, if in any particular month, no machine is operated and no production had taken place, there cannot be any levy of excise Duty. The manufacture of goods is condition precedent for charging of excise duty without which no levy can be made. Therefore, the rule cannot be made to go be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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