Abatement of duty under packing machine rules may be self-claimed without a separate order when statutory conditions are met.

Rule 10 of the Pan Masala Packing Machines Rules, read with section 3A(3) of the Central Excise Act, recognises proportionate abatement of duty where notified goods are not produced for a continuous period of fifteen days or more, subject to prescribed conditions. When the manufacturer gives the required prior intimation, the packing machines are sealed, and the adjusted amount does not exceed the admissible abatement, the duty reduction may be given effect to by self-computation in the succeeding month. The provision does not require a separate abatement order, and the cited circular did not add such a requirement. Abatement is treated as a reduction or diminution of duty, not a refund.

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Issues: Whether, under rule 10 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 read with section 3A(3) of the Central Excise Act, 1944, a manufacturer is entitled to abatement of duty on non-production of notified goods for a continuous period of fifteen days or more and may adjust that abatement suo motu against duty payable for the succeeding month without a separate abatement order.

Analysis: The statutory proviso to section 3A(3) contemplates abatement on a proportionate basis when the factory does not produce notified goods for a continuous period of fifteen days or more, subject to prescribed conditions. Rule 10 of the PMPM Rules provides for such abatement once the manufacturer gives the required prior intimation and the packing machines are sealed, but it does not prescribe any separate procedure for grant of abatement or require an abatement order by the authority. The circular dated 12 March 2009 dealt with pre and post audit of abatement orders and did not create a procedural requirement for the manufacturer or supplement the rules. In the absence of any express rule requiring a separate order, and where the conditions of rule 10 were satisfied and the amount adjusted did not exceed the abatement admissible, the assessee's calculation and adjustment of the reduced duty in the next month could not be treated as contrary to the statutory scheme. Abatement was held to be a reduction or diminution of duty and not refund.

Conclusion: The manufacturer was entitled to suo motu give effect to the abatement and no separate abatement order was necessary; the Revenue's challenge failed.

Ratio Decidendi: Where a fiscal rule grants abatement on satisfaction of specified conditions but is silent about the mode of grant, the assessee may avail the statutory reduction in duty by lawful self-computation, and a separate administrative order cannot be read into the provision.

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