Partial waiver granted for specific period; Rs. 1 crore deposit required for stay on recoveries

The Tribunal granted a partial waiver of demands for the period when only Scented Supari was manufactured, but required a deposit of Rs. 1 crore for a stay on recoveries until the final disposal of the appeals. The case underscores the intricacies of duty liability under the PMPM Rules and the significance of considering specific machine usage in duty calculations, emphasizing the necessity for thorough examination of issues during the final hearing.

---

---

Issues: Stay of operation of OIO, Duty liability under PMPM Rules, Exclusion of machines for Scented Supari, Calculation of duty liability, Waiver of demands, Conditions for stay.

Stay of operation of OIO: The appellant filed five appeals seeking a stay on the operation of a common OIO passed by the Commissioner, confirming demands of approximately Rs. 132 crore and penalties of Rs. 2.5 crore. The OIO pertained to five Show Cause Notices from June 2012 to November 2012.

Duty liability under PMPM Rules: The appellant used FFS machines for manufacturing Scented Supari and Pan Masala. The Revenue contended that duty liability should be calculated on all working machines, including those used for Scented Supari, under the PMPM Rules. The appellant argued that machines used exclusively for Scented Supari should be excluded from duty calculation.

Exclusion of machines for Scented Supari: The appellant claimed that since only Scented Supari was manufactured from July 2012 onwards, machines used for Gutkha/Pan Masala should not be considered for duty calculation under the PMPM Rules.

Calculation of duty liability: The Revenue argued that all operating machines, including those used for Scented Supari, should be considered for duty calculation under the PMPM Rules. The appellant contended that only machines used for Gutkha/Pan Masala should be included.

Waiver of demands: The Tribunal found that from July 2012, only Scented Supari was manufactured, justifying a waiver of demands for that period. However, for June 2012, machines were used for both Gutkha and Scented Supari, leading to a partial waiver. The contentious issues raised required detailed examination at the final hearing.

Conditions for stay: The Tribunal directed the appellant to deposit Rs. 1 crore within 8 weeks and report compliance. Stay on recoveries was granted subject to this payment until the final disposal of the appeals.

This judgment highlights the complexities of duty liability under the PMPM Rules, the importance of specific machine usage in duty calculations, and the need for detailed examination of issues during the final hearing. The conditions for stay provide a balance between the interests of the appellant and the Revenue pending the resolution of the appeals.

---