Abatement under the machine-based duty scheme requires complete stoppage of manufacture and sealing of all packing machines.

Abatement of duty under Rule 10 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines Rules, 2010 is available only on complete suspension of manufacture of the notified goods for a continuous period of fifteen days or more, with prior intimation and sealing of all packing machines so they cannot be operated during the stoppage period. Stopping only one machine or one line of production, while other notified goods continue to be manufactured or cleared, does not satisfy the rule. Under the capacity-based levy scheme in Section 3A(1) of the Central Excise Act, the abatement provision is confined to total cessation of the relevant manufacturing activity.

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Issues: Whether abatement of duty under Rule 10 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 was admissible when production in the factory did not come to a complete halt and one packing machine remained operative during the claimed period.

Analysis: Rule 10 permits abatement only where the factory does not produce the notified goods during a continuous period of fifteen days or more, subject to prior intimation and sealing of all packing machines so that they cannot be operated during the stoppage period. The condition is not satisfied by stopping only one machine or one line of production while other notified goods continue to be manufactured or cleared. The scheme under Section 3A(1) of the Central Excise Act, 1944 and the relevant rules proceeds on capacity-based levy, and the abatement provision is confined to complete suspension of manufacturing activity for the notified goods during the relevant period.

Conclusion: The appellant was not entitled to abatement because there was no complete stoppage of production or sealing of all machines for the claimed period.

Final Conclusion: The rejection of the abatement claim was sustained, and the appeal failed.

Ratio Decidendi: Abatement under the machine-based duty scheme is available only on complete cessation of manufacture for the prescribed continuous period with all packing machines sealed and incapable of operation.

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