Declared retail sale prices on one packing machine did not trigger a new machine deeming fiction under capacity rules.

Rule 8 of the Pan Masala Packing Machine (Capacity Determination and Collection of Duty) Rules, 2008 was construed to apply only where manufacture of goods with a new retail sale price begins during the month on an existing machine. Where the Form-I declaration had already disclosed, in advance, that the same packing machine would be used for pouches of two retail sale prices, that was not treated as commencement of a new retail sale price. The rule was read on its plain terms, and no additional fiction could be added to deem one declared machine as two. On that basis, the proviso was held prima facie inapplicable, and pre-deposit was waived with recovery stayed.

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Issues: Whether, for purposes of Rule 8 of the Panmasala Packing Machine (Capacity Determination and Collection of Duty) Rules, 2008, the use of one declared packing machine for manufacture of pan masala pouches of two retail sale prices in the same month amounted to commencement of manufacture of a new retail sale price so as to deem an additional machine for duty calculation.

Analysis: The Form-I declarations for each relevant month disclosed, in advance, that the same packing machine would be used for manufacture of pouches of two retail sale prices. The proviso to Rule 8 is attracted only when a manufacturer commences manufacture of goods of a new retail sale price during the month on an existing machine. On a plain reading, a new retail sale price means a retail sale price not already declared for that machine in the Form-I declaration. Where manufacture of more than one retail sale price was already declared for the same machine, the situation is not one of commencing a new retail sale price. The language of the rule was treated as clear, and no additional words could be added to deem one declared machine as two merely because it produced pouches of two retail sale prices.

Conclusion: The proviso to Rule 8 was held, prima facie, not applicable on the facts, and the appellant was found to have a strong prima facie case. Pre-deposit was waived and recovery was stayed.

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