Appellant directed to deposit Rs. 1 crore duty demand within 8 weeks

The Tribunal concluded that the Appellant failed to establish a prima facie case for a total waiver of pre-deposit. The Appellant was directed to deposit the entire duty demand of Rs. 1 crore within eight weeks. Upon deposit, the requirement of pre-deposit of interest and penalty was waived, and recovery stayed pending the appeal's disposal. Compliance was to be reported on 13.7.2012, and the appeal would be listed in due course.

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Issues Involved:
1. Liability for duty payment on sealed packing machines.
2. Applicability of Rule 10 of PMPM Rules for abatement.
3. Pro-rata basis duty payment.
4. Application of the judgment in the case of Godwin Steels (P) Ltd. vs. CCE.
5. Consistency in the adjudicating authority's decisions.

Issue-wise Detailed Analysis:

1. Liability for Duty Payment on Sealed Packing Machines:
The Appellant manufactured gutka and was liable to pay duty under Section 3A of the Central Excise Act, 1944, read with the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 (PMPM Rules). The Department contended that duty must be paid for each machine that operated at any point during the month, even if sealed for part of the month. The Appellant argued that duty should be on a pro-rata basis for the period machines were operational. The Commissioner confirmed a duty demand of Rs. 1 crore, asserting that the maximum number of machines installed on any day during the month determined the duty liability.

2. Applicability of Rule 10 of PMPM Rules for Abatement:
Rule 10 of PMPM Rules allows for abatement if the entire factory is closed for a continuous period of 15 days or more, with no production or clearance, and prior intimation given to the Central Excise Officer. The Appellant claimed eligibility for abatement as some machines were sealed for 15 days or more. However, the Tribunal held that Rule 10 was inapplicable as the entire factory was not closed, and other machines were operational during the period.

3. Pro-rata Basis Duty Payment:
The Appellant argued that duty should be calculated on a pro-rata basis for machines sealed for part of the month. The Tribunal noted that other than Rule 10, there is no provision in PMPM Rules for pro-rata duty payment. The Tribunal emphasized that under Rule 8, the number of operating packing machines for a month is the maximum number installed on any day during the month, and there is no provision for abatement for machines sealed during the month.

4. Application of the Judgment in the Case of Godwin Steels (P) Ltd. vs. CCE:
The Appellant cited the judgment in Godwin Steels (P) Ltd. vs. CCE, where the Punjab & Haryana High Court held that duty could not be charged for the period before production commenced. The Tribunal distinguished this case, noting that the dispute in Godwin Steels was about duty demand for the period before production started, whereas the current case involved machines sealed for part of the month.

5. Consistency in the Adjudicating Authority's Decisions:
The Appellant argued that the same Commissioner had previously accepted pro-rata duty payment in a similar case involving M/s Rajat Industries Pvt. Ltd. The Tribunal rejected this argument, stating that one wrong decision cannot justify another wrong decision.

Conclusion:
The Tribunal concluded that the Appellant had not established a prima-facie case for total waiver of pre-deposit. The Appellant was directed to deposit the entire duty demand of Rs. 1 crore within eight weeks. Upon deposit, the requirement of pre-deposit of interest and penalty was waived, and recovery stayed till the disposal of the appeal. Compliance was to be reported on 13.7.2012, and the appeal would be listed in due course.

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