Pro rata abatement under the pan masala levy applies for closed days, without insisting on full monthly duty first.

Abatement under the Pan Masala Packaging Machines Rules, 2008 is described as available on a pro rata basis for the days the factory actually remained closed and the machines were sealed. The text states that requiring prior payment of the full monthly duty before relief would defeat the scheme of the rules and make the pro rata mechanism redundant. It further notes that abatement should not be denied merely because the relief was adjusted while paying duty for the succeeding month; the closure period remained eligible for abatement.

---

---

Issues: Whether abatement under the Pan Masala Packaging Machines (Capacity Determination and Collection of Duty) Rules, 2008 can be claimed suo motu for the period when the factory remained closed and the machines were sealed, without first paying duty for the full month.

Analysis: The Tribunal followed its earlier precedent holding that duty liability under the special pan masala levy is to be worked out on a pro rata basis for the number of days the factory actually remained in operation. It accepted that insisting on prior payment of the full monthly duty before allowing abatement would defeat the scheme of the rules and render the pro rata mechanism redundant. The closure period during which the machines remained sealed was therefore eligible for abatement, and the demand to deny relief merely because the abatement was adjusted while paying the succeeding month's duty was not sustainable.

Conclusion: The issue was decided in favour of the assessee. Abatement could not be denied on the ground that the assessee had not first paid duty for the entire month and then claimed refund or adjustment.

---