2018 (9) TMI 170 - AT - Central Excise

Unit Status Key in Deregistration Eligibility Under Rule 16: Rejection of Dues-Related Application

Commissioner, Central Excise, Agra Versus M/s P & J Aromatics

The Commissioner (Appeals) set aside the Assistant Commissioner's rejection of an application for deregistration and refund claim due to pending dues ... Application for deregistration in terms of Rule 16 of Pan Masala Packing Machine (Capacity Determination and Collection of Duty)” Rules, 2008 and “Chewing Tobacco and unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty)” Rules, 2010 - rejection of application on the ground that the amount of ₹ 36,968/- stands confirmed against the appellant vide another Order dated 10.02.2016 and further an amount of ₹ 2432.38 lakhs is pending against their Unit No.I and Unit No.II, which are Units of the said assessee. Held that:- The respondent is a separately registered unit with Central Excise department and admittedly has no dues pending recovery by the Revenue. In reference to the pending dues against the other separate Central Excise units, is no ground for denial of deregistration to the present assessee in terms of Rule 16 of the said Rules - Rule 16 talks about the assessee only and not to any other unit of assessee. In any case, whatever demands was there in respect of other units, the same stands set aside by the Higher Appellant Forums and as such there is no pendency of any dues even against the other two units. Appeal dismissed - decided against Revenue. Issues:1. Rejection of application for deregistration and refund claim by Assistant Commissioner.2. Challenge of the orders by the assessee before Commissioner (Appeals).3. Interpretation of Rule 16 of the specified Rules.4. Dispute over pending dues against separate Central Excise units.5. Decision on the appeals filed by Revenue.Analysis:The judgment revolves around the rejection of the application for deregistration and refund claim by the Assistant Commissioner due to pending dues against the appellant. The appellant, engaged in manufacturing notified goods, decided to close their unit due to financial constraints. The Assistant Commissioner rejected the deregistration application citing confirmed dues against the appellant and pending amounts against their units. The Commissioner (Appeals) later set aside the orders, noting that previous demands against the units were decided in favor of the assessee by higher authorities. The appeals by the Revenue challenged these decisions.The crux of the matter lies in the interpretation of Rule 16 of the specified Rules regarding deregistration. The respondent had three separate units with different registration numbers. The deregistration and refund were applied only by one unit with no pending dues. The learned advocate highlighted that Rule 16 only requires an intimation for surrender of registration without the need for acceptance by authorities. The dues against other units, separately registered, were deemed irrelevant, especially since previous demands were in favor of the assessee.Upon review, the Tribunal found no dispute on the factual position. The respondent, as a separately registered unit, had no pending dues. The existence of dues against other units did not justify denying deregistration under Rule 16, which pertains to the individual assessee. Furthermore, previous demands against other units were set aside by higher forums, eliminating any pending dues. Consequently, the Tribunal rejected the Revenue's appeals, upholding the impugned orders of the Commissioner (Appeals).In conclusion, the judgment clarifies the application of Rule 16 in cases of deregistration, emphasizing the individual unit's status and pending dues. The decision underscores the importance of separate registrations and the irrelevance of dues against other units in determining deregistration eligibility.