2017 (11) TMI 750 - AT - Central Excise

Tribunal Upholds Duty Payment Timing, Rejects Interest Imposition

The Tribunal allowed the appeal in a case concerning duty payment under the Compounded Levy Scheme for a Tobacco making factory. It held that duty was ... Abatement of duty - Compounded Levy Scheme - Rule 9 of Tobacco Packing Machines Rules, 2010 - Held that: - admittedly the appellant have not done any production nor of any addition in machines during April, 2012. Accordingly, the appellant was required to deposit the duty, as it is case of addition of machines (as provided under Rule 9), the duty have been rightly paid before the 5th of the next month - On a harmonious reading of Rules 9 & 10 together under the admitted facts, there is proper compliance in taking suo motu abatement as the fact of the closer of the factory for a continuous of 15 days, was in the knowledge of the Revenue, as is evident from the Panchnama dated 16-4-2012 - there is no violation of provisions of Rule 10 of TPM Rules, 2010 - appeal allowed - decided in favor of appellant. Issues:1. Whether duty under the Compounded Levy Scheme for the whole month of April 2012 should be deposited or proportionate duty for the number of working days is required.Analysis:The appeal addressed the issue of duty payment by an appellant-assessee for a Tobacco making factory that was closed from 1-4-2012 to 15-4-2012, with production starting on 16-4-2012. The question was whether duty should be deposited for the entire month under the Compounded Levy Scheme or proportionate duty for the working days in April 2012. The Tribunal examined Rule 9 of Tobacco Packing Machines Rules, 2010, which mandates the payment of duty by the 5th of the month and filing of an intimation by the 10th. Additionally, Rule 10 allows for abatement if goods are not produced for 15 days or more, provided an intimation is filed three days prior to the period. The Tribunal found that since no production or addition of machines occurred in April 2012, duty was correctly paid before the 5th of the next month as per Rule 9. The Commissioner (Appeals) erred in confirming interest on the duty for the proportionate days and in suggesting a violation of Rule 10 by not availing abatement. However, the Tribunal held that there was no violation of Rule 10 as the factory closure for 15 days was known to the Revenue, as evidenced by the Panchnama. Consequently, the appeal was allowed, interest on duty was set aside, and the Misc. Application was disposed of.The Tribunal's analysis highlighted the importance of Rules 9 and 10 of the TPM Rules, 2010 in determining duty payment obligations for a Tobacco making factory. It emphasized that duty payment should align with the specific provisions of the rules, especially in cases of factory closure or non-production of goods. The decision underscored the significance of timely intimation to authorities regarding non-production to avail abatement as per Rule 10. By interpreting the rules harmoniously and considering the factual circumstances, the Tribunal clarified that the appellant's suo motu abatement was in compliance with the law, rejecting the Commissioner (Appeals)'s contrary view. The judgment provided a detailed explanation of the legal provisions and their application to the case at hand, ensuring a fair and accurate resolution based on the relevant statutory framework.