Declared retail sale prices on the same machine do not trigger the new-price proviso under Rule 8.

The first proviso to Rule 8 of the Panmasala Packing Machine Rules, 2008 does not apply where Form-I already declares that the same packing machine will be used to manufacture pouches of more than one retail sale price and duty is paid at the highest declared price. A declared retail sale price cannot be treated as a new retail sale price merely because multiple declared prices are produced on the same machine during the month. The provision must be applied as written, and the later retrospective amendment reinforced that duty is intended at the highest retail sale price in such cases. On that reasoning, the demand and penalty could not be sustained.

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Issues: Whether the first proviso to Rule 8 of the Panmasala Packing Machine (Capacity Determination and Collection of Duty) Rules, 2008 is attracted where, for the relevant month, the assessee had already declared in Form-I that the same packing machine would be used to manufacture panmasala pouches of more than one retail sale price and duty was paid at the highest declared retail sale price.

Analysis: The declaration in Form-I for each month specifically covered manufacture of panmasala pouches of Rs. 2 and Rs. 3 on the same machine. The first proviso to Rule 8 applies only when a manufacturer commences manufacture of goods of a new retail sale price on an existing machine during the month. A declared retail sale price cannot be treated as a new retail sale price merely because more than one retail sale price is manufactured on the same machine. The provision had to be read as written, without adding words to treat each declared retail sale price as a separate machine. The later retrospective amendment also supported the view that the legislative intent was to levy duty at the highest retail sale price where different retail sale prices were produced on the same machine during the month.

Conclusion: The first proviso to Rule 8 was not applicable, and the duty demand and penalty could not be sustained. The issue was decided in favour of the assessee.

Ratio Decidendi: Where the same machine is declared for manufacture of multiple retail sale prices in Form-I, production of those declared retail sale prices during the month does not amount to commencement of a new retail sale price on an existing machine for the purpose of the first proviso to Rule 8.

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