Refund under tobacco capacity rules available when factory remained closed and no production took place during the month.

The fourth proviso to Rule 9 of the Chewing Tobacco and Unmanufactured Tobacco Rules, 2010 applies to both permanent discontinuation of an existing retail sale price during the month and commencement of production of a new retail sale price during the month, and the phrase "during the month" governs both situations. The terms "permanently" and "new" do not require that the goods were never manufactured earlier or can never be manufactured again. Because the factory remained closed for the relevant period, no production took place, and the machines were sealed and unsealed under departmental supervision, the refund benefit was available. Denial of the refund was held unsustainable.

---

---

Issues: Whether the appellant was entitled to refund or abatement under the fourth proviso to Rule 9 of the Chewing Tobacco and Unmanufactured Tobacco (Determination of Capacity and Collection of Duty) Rules, 2010 when the machines remained closed during the relevant month and production did not take place.

Analysis: The fourth proviso to Rule 9 governs two situations, namely permanent discontinuation of an existing retail sale price during the month and commencement of production of a new retail sale price during the month. The expression "during the month" controls both situations, and the words "permanently" and "new" cannot be read to mean that the goods must never have been manufactured earlier or can never be manufactured again in future. On the facts, the factory remained closed for the relevant period, no production took place, and the machines were sealed and unsealed under departmental supervision. The cited decision on the same rule supported the view that the benefit is available where production of the relevant retail sale price commenced during the month even if such goods had been manufactured in earlier months.

Conclusion: The appellant was entitled to the refund benefit under the fourth proviso to Rule 9, and the denial of Rs. 22,32,258/- was unsustainable.

---