9911796707
TMI Blog2025 (4) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... price Rs.1.00 per pouch) in terms of Notification No.19/2010-CE dated 13.04.2010. During the said month, the appellant purchased one new machine i.e. one single Track FFS machine, namely, PST I and added in the factory during the month of March, 2012 and the said machine has been installed and operated for two days i.e. 13.03.2012 & 14.03.2012 for production of notified goods i.e. Chewing Tobacco without lime tube Tulshi 00 X 25 grms of paper pouch (Retail sale price of Rs.115.00 per pouch) in terms of Notification No.19/2010-CE dated 13.04.2010. All the three machines were in un-operational from 15.03.2012 onwards and there was no production in the factory of the appellant from 15.03.2012 to 10.04.2012 for a continuous period of more than 15 days. On 17.03.2012, the rate of duty was revised on higher side. Therefore, it was alleged by the Department that the amount of duty have to be paid for the entire month notwithstanding un-installation from 15.03.2012 onwards and for the period 17.03.2012 to 31.03.2012 at the increased rate on proportionate basis. Similarly, in respect of one "Rs.115/-RSP machine", the differential duty of Rs.5,35,84,193/- has been demanded for the full month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the appellants has pointed out the following submissions : Excise Appeal No.75381/2014 Rule 8 being referred by revenue reads as under Legal Text Remarks 8. Alteration in number of operating packing machines. - In case of addition or installation or removal or uninstallation of a packing machine in the factory during the month, the number of operating packing machines for the month shall be taken as the maximum number of packing machines installed on any day during the month : Provided that in case a manufacturer commences manufacture 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 packing machine for the month : Provided further that in case of non-working of any installed packing machine during the month, for any reason whatsoever, the same shall be deemed to be a operating packing machine for the month. Thus, firstly rule 8 simply comments on number of packing machines and it does not deal with calculation of duty. Secondly the last proviso also does not say that a discontinued machine shall be deemed to be operative for entire month. In terms of Rule 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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..................... Provided..................... Provided..................... Duty needs to be deposited in advance based on number of machines installed at the start of month and based on prevailing rate. Third Proviso: In case of addition of machines, differential Duty needs to be deposited in next month. Fourth Proviso: This proviso is not applicable in case of addition of machines of existing RSP or part stoppage of existing RSP. However, in case of total stoppage of particular RSP product or addition of altogether new RSP during the month, the Duty liability needs to be recalculated on pro rata basis with consequential refund or differential duty liability to be settled in next month. Further Pro rata calculation under this proviso can be extended for any number of days, even less than 15 days. Fifth Proviso: In case of revision of rate of duty during the month, the Duty liability needs to be recalculated on pro rata basis with consequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onth, the monthly duty payable shall be recalculated on the pro-rata basis of the total number of days in that month and the number of days remaining in that month starting from the date of such discontinuation .............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: Thus, on 15th March duty liability with respect to this machine needs tobe recalculated again as under. * The total number of days in the month of March 2012 = 31 days * Number of days remaining after discontinuance of manufacture = 17 * Therefore, duty liability with respect to this machine shall be reduced by = (17/31)*monthly duty per machine Therefore, the net duty payable for this machine on 5th day of subsequent month shall be effectively calculated for 2 days as under: = Duty liability added under Para 10 above -Duty liability reduced under Para 11 above =(19/31)*monthly duty per machine -(17/31)*monthly duty per machine = (2/31)*monthly duty per machine [this stand paidby 5th of the following month] Ground 2: abatement on account of closure for more than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) machines stands abated in terms of Rule 10. Excise Appeal No. E/75597/2015 Sr. No. RSP (in Rs.) Number of Machines No. of days of operation of machines in the month of November 2012 Duty deposited (Rs) Appellant stand Short Payment alleged Dep stand Category 1 4 2 30 [01.11.2012 to 30.11.2012] 80,00,000/- Duty deposited for the full month in advance under Rule 9 NIL No dispute Category 2 2 1 11 [20.11.2012 to 30.11.2012] 7,88,334/ - Duty was paid for 11 days on pro rata basis in terms of 4th proviso to Rule 9. 13,61,666/- Duty sought for full month TOTAL 13,61,666/- Calculation of duty on one machine of RSP Rs.2/- under fourth proviso The manufacturing of this new RSP commenced for the first time on 20.11.2012. As explained earlier under 4th proviso to rule 9, the duty liability with respect to this new machine of new RSP to be paid in next month shall be calculated as under. * The total number of days in the month of November 2012 = 30 days * Number of days remaining after commencement of manufacture = 11 * Therefore, additional duty liability (enhancement of duty liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duty shall be payable by the appellant under Rule 8 of Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 or 4th Proviso of Rule 9 of the said Rule, or not ? 11. For better appreciation of this issue, the Rules which are applicable to the facts and circumstances of the case, are extracted below : "Rule 8.Alteration in number of operating packing machines.- In case of addition or installation or removal or uninstallation of a packing machine in the factory during the month, the number of operating packing machines for the month shall be taken as the maximum number of packing machines installed on any day during the month : [Provided that where a manufacturer uses an operating machine to produce pouches of different retail sale prices during a month, he shall be liable to pay the duty applicable to the pouch bearing the highest retail sale price for the whole month.] Provided further that in case of non-working of any installed packing machine during the month, for any reason whatsoever, the same shall be deemed to be a operating packing machine for the month. Rule 9. Manner of payment of duty and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of duty leviable under section 3A of the Act, the monthly duty payable shall be recalculated on the 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 such revision and the duty 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 in case it is found that a manufacturer has manufactured goods of those retail sale prices, which have not 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 respect of all t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduction, whereupon the seal fixed on packing machines would be opened under the physical supervision of Superintendent of Central Excise." 12. The issue in these appeals have been dealt by this Tribuinal in the case of Trimurti Fragrances Private Limited Vs. Commissioner of Central Excise, Delhi III reported in 2015 (329) ELT 175 (Tri.-Del.), wherein this Tribunal has observed as under : "8. Rule 9 of the PMPM Rules titled "manner of payment of duty and interest" provides that "the monthly duty payable on notified goods shall be paid by 5th of the same month and an intimation in Form-2 shall be filed with the Jurisdictional Superintendent of Central Excise before the 10th day of the same month. First proviso prescribes that for the month of July, 2008 the duty shall be paid by 15th day of July, 2008. Second Proviso to Rule 9 provides that in case the duty is not paid by the due date, interest at the rate notified by the Government under Section 11AA/11AB would be payable for the period starting with first day after the due date till the date of actual payment of outstanding amount. Third Proviso deals with a situation where the number of operating packing machines has been in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese four machines, duty would be chargeable only for the 8 days from 24-7-2013 to 31-7-2013. 9. Thus, point of dispute is as to whether the Fourth Proviso to Rule 9 would be applicable to Rule 7 read with Rule 8. As discussed above, it is Rule 7 which prescribes the formula for calculation of duty by applying the appropriate rate of duty as specified in the Notification No. 42/2008-C.E. to the number of operating packing machines in the factory during the month, and Rule 8 specifies as to how number of operating packing machines is to be determined, and according to this Rule, the number of operating packing machine in a factory for a particular month shall be the maximum number of operating packing machine installed on any day during the month. The Fourth Proviso to Rule 9 is about recalculation of duty in the circumstances when during a month the manufacturer either permanently discontinues the manufacture of the goods of an existing RSP or commences the manufacture of goods of a new RSP. Thus the Fourth Proviso to Rule 9 is in respect of calculation of duty payable for a month and has to be treated as qualifying the provisions of Rule 7 read with Rule 8. Hon'ble Bombay High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e discharged duty liability on this basis only. Therefore, we hold that the duty demand of Rs. 1,51,35,483/- confirmed against the appellant on the basis that in respect of these 4 machines, the duty would be chargeable for the whole month, is not sustainable and has to be set aside". 13. Further, this issue was also examined by this Tribunal in the case of S.A.Freshners Private Limited Vs. Commissioner of Central Excise, New Delhi reported in 2018-TIOL-1026-CESTAT-DEL, wherein this Tribunal has held as under : "15. Having considered rival contentions, I find that under the PMPM Rules, the period of assessment is calendar month. It is evident from Rule 5 which provides for determination of capacity on monthly basis and the duty payable per machine is prescribed for each month. Further in several other rules, the reference to determination of duty, abatement of duty is with respect to month. On a conjoint reading of the rules as a whole particularly Rule 9 proviso 4, Rule 8 first proviso, Rule 6 (4), Rule 7, it is evident that the applicable rule in the facts of the present case is Rule 9 which provides for the monthly duty payable on notified goods shall be paid by the 5th day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at appellant should have paid entire duty for the month and only thereafter should have claimed rebate. This Tribunal held as follows:- "9. Thus, point of dispute is as to whether the Fourth Proviso to Rule 9 would be applicable to Rule 7 read with Rule 8. As discussed above, it is Rule 7 which prescribes the formula for calculation of duty by applying the appropriate rate of duty as specified in the Notification No. 42/2008-C.E. to the number of operating packing machines in the factory during the month, and Rule 8 specifies as to how number of operating packing machines is to be determined, and according to this Rule, the number of operating packing machine in a factory for a particular month shall be the maximum number of operating packing machine installed on any day during the month. The Fourth Proviso to Rule 9 is about recalculation of duty in the circumstances when during a month the manufacturer either permanently discontinues the manufacture of the goods of an existing RSP or commences the manufacture of goods of a new RSP. Thus the Fourth Proviso to Rule 9 is in respect of calculation of duty payable for a month and has to be treated as qualifying the provisions of Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om 24th July to 31st July and not for the entire month. The appellant have discharged duty liability on this basis only. Therefore, we hold that the duty demand of Rs. 1,51,35,483/-confirmed against the appellant on the basis that in respect of these 4 machines, the duty would be chargeable for the whole month, is not sustainable and has to be set aside". 14. Again, in the case of Arora Tobacco Private Limited Vs. Commissioner of Central Excise & Service Tax, Jaipur I reported in 2019-TIOL-962-CESTAT-DEL, this Tribunal relying on the decision of the Hon'ble Gujarat High Court in the case of M/s Thakkar Tobacco Products Private Limited (supra), held that the duty shall be payable in terms of 4th Proviso to Rule 9 of the Rules. 15. In view of the above discussion and relying on the above cited judgements, we hold that the appellant is liable to pay duty in terms of 4th Proviso to Rule 9 of the Rules. Therefore, Issue No.(1) is in favour of the appellant. 16. As the Issue No.(1) is decided in favour of the appellant, therefore, the duty is not payable on enhanced rate of duty w.e.f.17.03.2012 in the Appeal No.E/75381/2014 in terms of Proviso 5 of Rule 9 ibid as the said proviso doe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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