Tribunal rules on duty for Pan Masala packaging methods The Tribunal set aside the demand for duty on Pan Masala packed manually in tins but upheld the duty demand for Pan Masala packed in pouches with packing ...
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Tribunal rules on duty for Pan Masala packaging methods
The Tribunal set aside the demand for duty on Pan Masala packed manually in tins but upheld the duty demand for Pan Masala packed in pouches with packing machines for the day when the machines were installed but not sealed. The original authority was directed to re-quantify the demand, resulting in a partial allowance of the appeal.
Issues: 1. Demand for duty on Pan Masala packed manually in tins. 2. Demand for duty on Pan Masala packed in pouches with packing machines.
Issue 1: Demand for duty on Pan Masala packed manually in tins The appellant argued that the Compounded Levy Scheme did not apply to Pan Masala packed in tin containers, citing a CBEC circular. The circular clarified that the scheme was only for Pan Masala packed in FFS machines. The Tribunal confirmed that the demand for duty on Pan Masala packed in tin containers was not sustainable based on the circular, and thus set it aside.
Issue 2: Demand for duty on Pan Masala packed in pouches with packing machines The appellant contended that no duty was payable for Pan Masala packed in pouches on 01.07.2008 as there was no manufacturing activity that day. Additionally, the appellant highlighted that the relevant notification was uploaded on the CBEC website only after the day in question. However, the Tribunal found that the Compounded Levy Scheme mandated duty payment based on the number of FFS machines installed in the factory. The appellant had requested sealing of the machines on 02.07.2008, thereby avoiding duty liability from that date onwards. Since the machines were available for production on 01.07.2008 but not sealed, the Tribunal held that duty was payable for that day. Consequently, the demand for duty on Pan Masala packed in pouches with packing machines was sustained, and the original authority was directed to re-quantify the demand, leading to a partial allowance of the appeal.
In conclusion, the Tribunal set aside the demand for duty on Pan Masala packed manually in tins based on the CBEC circular. However, it upheld the duty demand for Pan Masala packed in pouches with packing machines for the day when the machines were installed but not sealed, directing a re-quantification of the demand.
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