High Court affirms CESTAT ruling on abatement under Pan Masala Rules and late duty interest. Procedural compliance emphasized.

The High Court upheld the CESTAT's decision, ruling that the Assessee was entitled to abatement under the Pan Masala Packing Machines Rules but was liable to pay interest for late duty deposit. The Court emphasized compliance with procedural obligations and clarified that closure for less than 15 days in a month does not disentitle an Assessee to claim abatement. The appeal was dismissed as no substantial question of law arose from the CESTAT's order, affirming the decision.

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Issues:
Appeal against CESTAT order partially setting aside Commissioner's order on duty payable for August 2012, abatement of duty under PMPM Rules, compliance with procedural obligations, liability to pay interest.

Analysis:
1. The appeal under Section 35G of the Central Excise Act, 1944 challenged the CESTAT order partially setting aside the Commissioner's order regarding duty payable for August 2012. The CESTAT upheld the requirement for the Assessee to pay interest on the differential duty, as per the show cause notice dated 23rd May 2013.

2. The Respondent Assessee, engaged in Gutka manufacturing, paid central excise duty under the compounded levy scheme as per the Pan Masala Packing Machines (PMPM) Rules, 2008.

3. The Assessee requested sealing of machines in August 2012, with no manufacturing activity from 14th to 31st August 2012. An abatement order was issued on 28th August 2012, paying duty for 13 days on a pro rata basis.

4. The Department issued a show cause notice in May 2013, demanding duty payment for the entire month. The Commissioner confirmed the demand, imposed interest, penalty, and cess amounts.

5. The CESTAT noted the Assessee's entitlement to abatement but highlighted non-compliance with procedural obligations under the PMPM Rules. It referenced previous decisions emphasizing that failure to comply results in liability for interest only.

6. The CESTAT's order was based on the interpretation of PMPM Rules and upheld the Assessee's right to abatement while emphasizing the obligation to pay interest for late duty deposit.

7. The High Court referred to a previous case where it was held that closure for less than 15 days in a month does not disentitle an Assessee to claim abatement. Rule 10 mandates intimation of closure and allows abatement if the factory does not produce goods for 15 consecutive days.

8. The Court concluded that the failure to pay duty upfront by the 5th day of the month does not deprive the Assessee of pro rata abatement entitled during factory closure. The Assessee is liable to pay interest for late duty deposit.

9. The Court dismissed the appeal, stating that no substantial question of law arose from the CESTAT's order, thereby upholding the decision.

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