TMI Blog2023 (5) TMI 803X X X X Extracts X X X X X X X X Extracts X X X X ..... uage of Rule 17(2) as amended by the Second Amendment Rules, makes it explicit that it would apply from 01.07.2008, is unpersuasive. A plain reading of Rule 17(2) as amended by the Second Amendment Rules indicates that it provides for the manner of computing the duty payable in respect of goods manufactured or cleared from the unit, which is not registered with the concerned Central Excise office - Undisputedly, the duty is liable to be computed on the presumption that the machines found at such premises are in operation since 01.07.2008. The duty is required to be calculated by applying the appropriate rate of duty, as specified in the Notification No. 42/2008 C.E. dated 01.07.2008, to the number of packing machines operating in the factory during that month. In the present case, it cannot be accepted that it is implicit in the provisions of the amended Rule 17(2), that it applies retrospectively for purposes for determination of duty in respect of searches conducted prior to 20.10.2008. Undisputedly, for searches conducted after the Second Amendment Rules came into force, the duty would be determined by assuming unless established to the contrary that the machines found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... domestic market. Respondent no. 2 is one of its constituent partners. 8. Upon receiving information that the respondents were clandestinely removing goods without obtaining the requisite Central Excise Registration; without accounting for the goods manufactured; and without paying the appropriate Central Excise Duty, a search was conducted at the premises of respondent no. 1 House No. 786, opposite Kalandeshwar Shiv Temple, Village Burari on 04.08.2008. During the search, the following items were found: (a) Five pouch packing machines found in working condition. Besides the same, two more dismantled pouch packing machines were found and one mixer machine was also found. (b) The finished goods seized from the factory were valued at ₹3,85,000/- (which also includes the gutkha pouches having a maximum retail price (MRP) of ₹1/- manufactured by the respondents). 9. The machinery available at the premises were valued at ₹3,75,000/-. The same were seized and handed over to respondent no. 2 on superdignama dated 04.08.2008. The factory premises was sealed thereafter. 10. Statements of respondent no. 2 and one Sh. Rajeev Gupta (Supervisor with respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r-in-Original dated 30.11.2017 was reviewed by the Chief Commissioner of Central Goods Services Tax, Delhi Zone and he directed filing of an appeal before the Tribunal. The appeal indicates that he had found the Order-in-Original to be not legal and proper on the following grounds: I. The AA erred in dropping the quantum of demand amounting to Rs. 70,17,912/- raised vide SCN dated 29.01.2009 without appreciating the provisions brought in vide Notification No. 45/2008-CE(N.T.) dated 20.10.2008. II. The AA also erred by not imposing any penalty on Sh. Sumit Aggarwal (Partner) by relying upon the Hon ble High Court order in the case of Vinod Kumar Gupta, reported as 2013 (287) E.L.T. (54) which is further appealed and pending with Honble Supreme Court. 16. The appeal preferred by the Revenue was rejected by the impugned order. 17. As is apparent from the above, the controversy before the Tribunal was two-fold. First, whether the Adjudicating Authority had erred in determining the quantum of duty at ₹26,29,439/-, which was less than the duty determined under the Order-in-Original dated 23.04.2010 by an amount of ₹70,17,912/-. And second, whether the Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all such goods shall be liable to confiscation, and the manufacturer shall be liable to a penalty not exceeding the duty leviable on the notified goods in respect of which aforesaid contravention has been committed. (2) If it is found that goods have been cleared from a unit which is not registered with the jurisdiction of Central Excise Office, then its duty liability for the period till it was not registered, shall be determined as if the goods manufactured by the unit were not eligible for levy and assessment under notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 29/2008-C.E.(N.T.), dated the 1st July, 2008 and dealt with accordingly. 24. It is material to note that the premises of respondent no. 1 was searched on 04.08.2008. As on the date of the said search, Rule 17 as set out above was applicable. Respondent no. 1 is not registered with the Excise Department and there is no dispute that the Adjudicating Authority has determined the duty payable in terms of Rule 17(2) of the PMPM Rules as in force on the date of the search. 25. The Central Government notified the Second Amendment Rules by Notification No.45/2008 Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08, rule 17(2) had not been amended and the amended rule 17(2) cannot impose duty at a higher rate with retrospective effect. 28. We find no infirmity with the aforesaid view. 29. It is material to note that Rule 1(2) of the Second Amendment Rules expressly provides that they shall come into force on 20.10.2008 . Thus, the contention that Rule 17(2) as amended by Second Amendment Rules would also apply to searches conducted prior to 20.10.2008 militate against the express language of Rule 1(2) of the Second Amendment Rules. Further, the contention that the language of Rule 17(2) as amended by the Second Amendment Rules, makes it explicit that it would apply from 01.07.2008, is unpersuasive. A plain reading of Rule 17(2) as amended by the Second Amendment Rules indicates that it provides for the manner of computing the duty payable in respect of goods manufactured or cleared from the unit, which is not registered with the concerned Central Excise office. Undisputedly, the duty is liable to be computed on the presumption that the machines found at such premises are in operation since 01.07.2008. The duty is required to be calculated by applying the appropriate rate of duty, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the courts that the persons or authority exercising subordinate legislative functions cannot make a rule, regulation or bye-law which can operate with retrospective effect. 18. The principle has been affirmed in many decisions such as Hukam Chand v. Union of India [Hukam Chand v. Union of India, (1972) 2 SCC 601 : (1973) 1 SCR 896] , RTO v. Associated Transport Madras (P) Ltd. [RTO v. Associated Transport Madras (P) Ltd., (1980) 4 SCC 597 : 1981 SCC (Tax) 9] ; Federation of Indian Mineral Industries v. Union of India [Federation of Indian Mineral Industries v. Union of India, (2017) 16 SCC 186] and recently, in Union of India v. G.S. Chatha Rice Mills [Union of India v. G.S. Chatha Rice Mills, (2021) 2 SCC 209] . 33. In the present case, we are unable to accept that it is implicit in the provisions of the amended Rule 17(2), that it applies retrospectively for purposes for determination of duty in respect of searches conducted prior to 20.10.2008. Undisputedly, for searches conducted after the Second Amendment Rules came into force, the duty would be determined by assuming unless established to the contrary that the machines found were operative from 01.07.2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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