TMI Blog2019 (1) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant assessee by holding that it cannot be said that the appellant is not entitled for the refund/abatement under 4th Proviso to Rule 9 of the CTD Rules. Suo-moto entitlement of abatement - Held that:- Hon’ble Gujrat High Court in the case of Thakkar Tobacco products Pvt. Ltd. [2015 (2) TMI 606 - CESTAT AHMEDABAD] held in favour of the assessee and the said ruling has been accepted by the Revenue as is evident from Circular No. 1036/2/2018 dated 16th February 2018. Appeal allowed - decided in favor of appellant. - Excise Appeal No. E/50232/2016-(DB) - A/53517/2018-EX[DB] - Dated:- 15-11-2018 - Mr. Anil Choudhary, Member (Judicial) And Mr Bijay Kumar, Member (Technical) Shri B.L. Narsimahan, Adv. for the appellant Shri P. Juneja, DR for the respondent ORDER Per: Mr. Anil Choudhary 1. The issue involved in this appeal is whether in respect of such machines which have operated for a part of the month, the duty would be payable only on pro-rata basis for the number of days in the month during which the machine had functioned or would be payable for the whole month without giving abatement for the period for which the machine was sealed or out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02.2012. No other machine was installed. Thus, the appellant s factory entered a state of total closure from 01.2.2012 to 24.02.2012. Accordingly, appellant paid the duty on proportionate basis for the remaining days of February 2012 when these two machines were installed and lying unsealed i.e. from 25.02.2012 to 29.02.2012, by claiming suo moto abatement as per Rule 10 of the CTD Rule because the factory was closed for more than 15 days. 2.5 The aforesaid two machines, after being unsealed on 25.02.2012, ran for the entire month of March, 2012. No duty liability on the appellant s part has been alleged/confirmed for March 2012 in the present proceedings. 2.6 With regards to remaining months of April 2012 to September 2012, since as new RSP had been commenced or an existing RSP had been discontinued in each of these months, Appellant discharged its duty liability on pro-rata basis by paying duty for those days on which the machines were installed and lying unsealed in terms of 4th proviso to Rule 9 of the CTD Rules. The period during which the relevant machines remained installed and lying unsealed in the Appellant s factory, is summarized below:- Machin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns rebutting each allegation contained in the SCN. The appellant also filed additional written submissions vide letters dated 28.10.2013 during the personal hearings before the then adjudicating authority. 2.10 The SCN was adjudicated vide the impugned Order-in-Original dated 18.11.2015 whereby the Ld. Commissioner, Jaipur, confirmed the duty demand, along with interest and penalty, as proposed in the SCN. The impugned order held, inter alia, that since the appellant did not challenge the ACD Orders, the same had attained finality; that the provisions related to abatement clearly show that abatement is not suo moto, but is required to be claimed, that even if a particular machine was not working for certain days in a month, the same shall be deemed to be operating packing machines for the entire month in terms of Rule8; that the Appellant has not filed abatement claims before the proper officer, nor any abatement orders have been issued by such officer to the appellant; that during the months of April, May, June, July, August and September, at least one machine was running during the entire month, thus, primary condition of complete stoppage of production in the factory under Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt suo moto as according to him, the Appellant was required to pay duty first in accordance with the ACD Orders and thereafter, claim abatement by filing a separate claim before the proper officer. 3.4 In this regard, it is submitted that for the month of February 2012, the Appellant has not paid the duty first as specified in the ACD Orders, instead, has calculated and paid proportionate duty only for the period when machines were installed and lying unsealed. For the period when the Appellant's factory remained closed for 24 days (i.e. from 01.02.2012to 24.02.2012), Appellant claimed suo moto abatement of such closure period when the machines were uninstalled and lying sealed by the Department. The same is evident from Annexure-A to the SCN revealing that Machine Nos. 25 26 were sealed on 31.01.2012 and thereafter unsealed on 25.02.2012. 3.5 Further, the aforesaid abatement claim was made by duly complying with the conditions laid down under proviso to Section 3A(3) of the Excise Act read with Rule 10 of the CTD Rules. The Appellant had also followed the procedure of sealing and unsealing of machines by duly intimating the Department, as evident from the voluminous an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The said order of the Hon'ble High Court has been accepted by the Department vide Para 7 (Part-I) of the Board's Circular No. 1063/2/2018-CX dated 16.02.2018. In view of above, it is submitted that the demand for the month of February 2012 is not legally sustainable. Demand for April 2012 to September 2012 not sustainable as Appellant had correctly paid duty on pro-rata basis under 4thproviso to Rule 9 of the CTD Rules. 4.1 Pertaining to the remaining months of period of dispute, i.e. from April 2012 to September 2012, the impugned order held that abatement claim is not permissible because Appellant's factory was not fully closed. In this regard, it is submitted that claim of abatement for the said period is available to the Appellant in terms of 4th proviso to Rule 9 of the CTD Rules. 4.2 Rule 9 deals with manner of payment of duty and interest, however, 4th proviso to the said rule deals with manner of calculation of duty in two scenarios where (1) any existing RSP is discontinued permanently during the month; or (2) production of goods of a new RSP is commenced during the month. It needs to be appreciated, at this juncture, that the scenario of permane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/-w.e.f. 21.05.2012 23 5/-w.e.f. 26.05.2012 26 1.50/-w.e.f. 01.05.2012 26 1.50/-w.e.f. 21.05.2012 June 25 3/-w.e.f. 21.06.2012 ------- 26 1.50/-w.e.f. 14.06.2012 July 23 5/-w.e.f. 19.07.2012 23 5/- w.e.f. 24.07.2012 26 1.50/-w.e.f. 24.07.2012 August 23 5/- w.e.f. 24.08.2012 26 1.50/- w.e.f. 20.08.2012 26 1.50/- w.e.f. 11.08.2012 September 26 1.50/-w.e.f. 16.09.2012 4.6 Thus, in view of above, it is submitted that the Appellant was legally correct 'in paying duty on proportionate basis in terms of 4thproviso to Rule 9 and therefore, duty demand confirmed under Rule 7 read with Rule 8 is not legally sustainable. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of Rule 7 and 8. 6.1 It was further held in the said case that if the department's contention is accepted it would make Fourth Proviso to Rule 9 redundant. Thus, it was held that duty on machines installed w.e.f. 24.07.2013 for commencement of manufacture of goods of new RSP, should be charged for 8 days only in the month of July 2013. 6.2 Further, it is submitted that the Ld. Commissioner has wrongly interpreted 2nd proviso to Rule 8 in the impugned order inasmuch as the said proviso provides for treating an installed machine as operating during the period of installation even if the same has been in a non-working condition i.e. no goods have been produced by the assessee. In the present case, the Appellant has never claimed that the relevant machines were not working during the disputed period even if they were installed. Thus, 2nd proviso to Rule 8 is not applicable to the present case and heavy reliance placed by the Department on the same is legally not sustainable. 7. The Ld. Commissioner also observes that the ACD Orders passed by the Deputy Commissioner were final, unless the same are challenged by the Appellant. And, since Appellant did not cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of closure. In the instant case, it is clear that the entire factory was not closed. A few machines were working and production was on. It is not the case of the assessee-Appellants that entire factory was closed for a continuous period of 15 days or more during which there was absolutely no manufacturing activity and no removal of the finished goods. Therefore, abatement under Rule 10 is not available. Hence, we are of the view that abatement under Rule 10 cannot be given in respect of individual machines which may have been sealed for a continuous period of 15 days or more, when during that period, other machines were functioning and factory was in operation. 14. At this stage, it may also be mentioned that other than Rule 10, there is no provision for charging duty on pro-rata basis in respect of machines which, for the reason of being sealed, were operating only during part of the month. 15. In view of the above, we find no reason to interfere with the impugned order and the same is hereby sustained along with the reasons mentioned therein. 9. Opposing the contention of the Ld. Counsel for Revenue further states that the said ruling of this Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er by the 20th day of the next month, whereas Rule 8 provides in case of addition or installation or removal or un-installation of a packing machine in the factory during the month, the number of operating packing machine for the month shall be taken as the maximum number of packing machines installed on any day during the month. Further, the first proviso provides that in case a manufacturer commences manufacturing of goods of a new retail sale price during the month on an existing machine, it shall be deemed to be an addition in the number of operating machines for the month. Thus, the purport of Rule 8 by way of example is that on a particular machine a say a manufacturer is producing notified goods of MRP ₹ 1/- for the first 10 days of the month and on the same machine a he starts manufacturing notified goods of MRP ₹ 2/- for the balance number of days, in that case it will be deemed the manufacturer has been manufacturing notified goods of ₹ 2/- MRP for the whole month and duty shall be payable accordingly. As the period of assessment is month to month and admittedly the appellant have not manufactured notified goods of ₹ 2/- MRP from 1st to 9th Jul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the construction which would make construction unnecessary and redundant should be avoided. 9.1 If the Department s contention is accepted, it would make the Fourth Proviso to Rule 9 redundant, which in view of the above mentioned judgment of Hon ble Bombay High Court is not permissible. The Fourth Proviso to Rule 9 clearly states that in case a manufacturer permanently discontinues the manufacture of goods of existing RSP, his monthly duty liability shall be re-calculated on pro rata basis of the total number of days in that month and the number of days remaining in that month counting from the date of discontinuation and in case the amount of duty is so recalculated is less than the duty paid for the month the balance shall be refunded to him by 20th of the following month. This proviso also states that in case a manufacturer in a particular month commences manufacturing of the goods of a new RSP, his monthly duty liability shall be recalculated pro rata on the basis of total number of days in that month and the number of days remaining in that month counting from the date of commencement and duty liability for the month shall be discharged unless the differential duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and considering the precedent judgments, we hold that the ruling in the case of Shiv Shakti Agrifood Pvt. Ltd. Final Order No. 16/4/2018 is per incuriam as the said ruling has been passed without taking notice of the provisions of the Rule 9 Fourth Proviso and also the earlier precedent judgments of this Tribunal. 11. We also take notice that in a subsequent order under similar facts and circumstances with the same assessee Single Member Bench of this Tribunal in Final Order No. 51682/2018 dated 12th April 2018, has followed the earlier ruling of SA Freshner Pvt. Ltd. (Supra) and have held accordingly in favour of this appellant assessee. 12. So far as the issue is concerned, we find that Hon ble Gujrat High Court in the case of Thakkar Tobacco products Pvt. Ltd. [2015-TIOL-2545-HC-AHM-CX] held in favour of the assessee and the said ruling has been accepted by the Revenue as is evident from Circular No. 1036/2/2018 dated 16th February 2018. 13. In view of this matter we hold both the questions/ issues in favour of the appellant and against the Revenue. Accordingly, the appeal is allowed and the impugned order is set aside with consequential relief. (Dictated and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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