Tribunal rules duty on pro-rata basis for production days, allows abatement without formal application

The Tribunal ruled in favor of the appellant, stating that duty should be paid on a pro-rata basis for the days when production occurred, allowing for abatement on non-production days. It clarified that manufacturers can avail abatement without filing a formal application, as long as they inform the relevant authorities. The Tribunal emphasized that previous decisions and Board circulars are not binding if they conflict with statutory provisions. The Tribunal upheld the appellant's compliance with the rules and dismissed the revenue's appeal, confirming the duty calculation method for the specific case.

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Issues Involved:
1. Whether the duty for the entire month must be paid or on a pro-rata basis for the days when production took place.
2. The procedure for claiming abatement of duty under the Chewing Tobacco and Un-manufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010.
3. The applicability of previous Tribunal decisions and Board circulars on the current case.

Summary:

1. Duty Payment for the Entire Month vs. Pro-rata Basis:
The primary issue is whether the duty for December 2011 should be paid for the entire month or on a pro-rata basis for the four days when production occurred. The department contends that the duty for the entire month should be paid in advance, with abatement claimed for non-production days. However, the Tribunal found that this situation is revenue-neutral, as the appellant is entitled to claim abatement for the days when production did not occur. The Tribunal referenced previous decisions where similar demands were set aside, reinforcing that duty should be calculated only for the production days.

2. Procedure for Claiming Abatement:
The Tribunal examined whether a manufacturer can suo motu avail the benefit of abatement for non-production periods or must file an application for abatement, subject to the refund procedure under Section 11B of the Act, 1944. The Tribunal concluded that the language of Rule 10 of the 2010 Rules allows manufacturers to calculate duty by reducing it on a proportionate basis for non-production periods, provided they file an intimation with the Deputy Commissioner or Assistant Commissioner of Central Excise.

3. Applicability of Previous Tribunal Decisions and Board Circulars:
The Tribunal referenced several previous decisions, including Thakkar Tobacco Products Pvt. Ltd., which supported the appellant's position. The Tribunal also noted that Board circulars, while informative, do not have statutory force and cannot override judicial pronouncements. The Tribunal found that the appellant had complied with the conditions stipulated in Rule 10, such as filing the necessary intimation and following the required procedures for abatement.

Conclusion:
The Tribunal upheld the order to the extent of the demand involved in the present revenue's appeal and dismissed the revenue's appeal accordingly. The decision was pronounced in the open court on 11.09.2023.

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