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TMI Blog2023 (9) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... maximum retail price of Rs. 2/- per pouch and Rs. 5 per pouch in respect of 25 pouch packing machines. As the respondent were working under compounded levy scheme, they were required to pay the duty on number of pouch packing machines (PPMs), installed and working during the month. The respondent was required to pay total duty of Rs. 11,25,00,000/- for all 25PPMs installed and in working condition in their factory during the month of June 2011. Accordingly they have paid central excise duty of Rs. 11,25,00,000/- during the month of June, 2011. Respondent vide letter dated 22.06.2011 requested to the Assistant Commissioner, Central Excise Division IV Ahmedabad -II, for sealing of all the said 25PPMs with effect from 25.06.2011, which were sealed by the Range Superintendent at midnight of 24.06.2011. The respondent, thereafter filed refund claim amounting to Rs. 2,25,00,000/- online before Jurisdictional Assistant Commissioner for the amount of duty paid in respect of 25 pouch packing machines, which were closed and sealed during the period from 25.06.2001 to 30.06.2011 i.e. for 6 days. The refund sanctioning authority vide Order-In-Original dated 06.09.2011 sanctioned the refund cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at 24.00 hrs on 24.06.2011, and the assessee cleared the goods upto 27.06.2011 i.e. beyond the stipulated period of two days. 3. On the other hand, the Learned Consultant Shri N.K. Tiwari opposed the contention of the revenue and reiterates the finding of impugned order. 4. We have carefully considered the submissions from both the sides and perused the records. 4.1 On going through the content of letter dated 24-06-2011 of the respondent addressed to the Jurisdictional Officers, it is seen that the respondent clearly informed the department that M/s Vishnu Packing, a partnership firm is holding valid registration certificate for the manufacture of Pan Masala and Pan Masala containing tobacco, commonly known as Gutka, falling under Chapter 21 and 24 respectively. They have changed the constitution of said firm and has converted into Private Limited company with effect from 21.06.2011. They have been issued certificate of incorporation under the name and style of Vishnu Pouch Packing Pvt. Ltd. and have been issued Corporate Identity Number. Further they also informed the department that they have applied for PAN No. and on receipts of the same, they will apply for New Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more and followed the procedure as mentioned therein. On the other hand, Rule16, starts with the words "Notwithstanding anything contained in these rules", make it clear that nevertheless all the provisions in Rules 2008 when a manufacturer permanently cease, to work in respect of all the machines installed in the factory and filed an intimation for surrender of registration with the Deputy Commissioner of Central Excise, the monthly duty payable shall be recalculated on pro-rata basis and the excess amount paid by them shall be refunded. The expressions "a manufacturer permanently ceases to work in respect of all the machines installed in the factory" in Rule16 have wide amplitude. This should be read with the broad and comprehensive meaning to cover the situation, other than Rule 10 of non-production of goods for temporary period. To sum up, Rule 10 extended abatement in case of non-production of goods for certain period. But, Rule16 would apply in case, a manufacturer closed down his factory in respect of all the machines installed in the factory. 4.5 Further, the other aspect is that the use of words "operating packing machine" in Rules 5, 6(3), 7 and 8 would indicate that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levied and collected excise duty on excisable goods which are produced or manufactured in India. From this, it is evident that excise duty is an incidence of tax on production or manufactured of the goods. That being the case, it is difficult to sustain the plea that the appellant assessee can be charged excise duty for the period during which his unit had not even commenced the production. The department is seeking to justify the impugned order under Rule 9 of PMPM Rules of 2008 framed under Section 3A of the Central Excise Act. Section 3A confers power on the Central Government to charge excise duty on the basis of capacity of production in respect of notified goods. The basic object of conferring such power on the Central Government is to prevent evasion of excise duty in respect of certain excisable goods with a view to safeguard the interest of revenue. This, does not mean that Section 3A confer power on the Government to frame the rules to charge excise duty for the period prior to the commencement of production. Therefore, in our view the impugned order confirming demand for First three days of May 2009 when the production had not even commenced cannot be sustained. In our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturer filed an intimation to the Deputy/ Assistant Commissioner of Central Excise intimating permanently ceases to work for surrender of registration. There is no bar on reopening of the factory with new registration in Rules, 2008, which is a subsequent event. Further, the respondent in its letter categorically stated that they were giving intimation of closure of the factory-as required under the Rules, would be implied surrender of registration. Further on their request letter department also acted and sealed the machines. The respondent should not be penalized by rejecting the refund claims, for the reason, the constitution has been changed and after obtaining fresh registration the factory was opened as new by the different legal enitity and considering the same as not permanently ceases, would be totally unjust, improper and against all cannons of natural justice and fair play. So, in such peculiar facts and circumstances of the case, we hold that the respondent is entitled to refund of the duty for closing down of their factory for the disputed period. 4.8 In the undisputed facts of this case one important aspect needs to be kept in mind that the revenue gravely erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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