Abatement of duty under packing machine rules fails where production continues through another machine and stoppage is not complete.

Abatement of duty under the packing machine rules is available only when notified goods are not produced for a continuous period of at least fifteen days and all packing machines are sealed so they cannot operate during the stoppage. Where manufacture and clearances continue through another operative machine, partial non-operation of one machine does not satisfy the statutory conditions for abatement. On that basis, the claimed pro rata relief was inconsistent with the capacity-based levy scheme under the Central Excise Act and the packing machine rules, and the rejection of the abatement claim was upheld.

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Issues: Whether abatement of duty was admissible when the assessee claimed non-operation of only one packing machine for part of the relevant period while production continued through another machine.

Analysis: The dispute turned on Rule 10 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010, which permits abatement only where the factory does not produce the notified goods during a continuous period of fifteen days or more and the packing machines are sealed so that they cannot be operated during the period of stoppage. The assessee continued manufacturing and clearing notified goods through another operative machine during the claimed period. On that basis, the condition of total cessation of production and complete stoppage of the machines was not satisfied. The scheme of levy under Section 3A(1) of the Central Excise Act, 1944 and the packing machine rules was intended to regulate duty collection on capacity basis, and the claimed pro rata abatement was inconsistent with that framework.

Conclusion: The assessee was not entitled to abatement of duty, and the rejection of the claim was in law.

Final Conclusion: The appeal failed and the order rejecting the abatement claim was upheld.

Ratio Decidendi: Abatement under the packing machine rules is available only on complete stoppage of production and sealing of all packing machines for the prescribed continuous period; partial non-operation of one machine while manufacture continues does not qualify.

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