Departmental sealing of machines can justify excise duty refund when non-production is involuntary under the abatement scheme.

Refund of excise duty was treated as admissible where notified goods could not be produced because departmental officers sealed the pouch packing machines. The statutory abatement framework under Section 3A of the Central Excise Act and Rules 10 and 16 of the Pan-Masala Packing Machines Rules, 2008 was applied to an extraordinary, involuntary closure rather than a planned shutdown or permanent cessation. As production was prevented by departmental action and the manufacturer had no control over the interruption, duty for that period was held unsustainable. Prior Tribunal reasoning recognising refund in similar compelled-closure circumstances was followed, and the department's challenge failed.

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Issues: Whether excise duty was refundable for the period during which the pouch packing machines remained sealed by the departmental officers and the assessee was unable to produce notified goods, and whether such situation fell outside the normal abatement conditions under the Pan-Masala Packing Machines Rules, 2008.

Analysis: The dispute arose from non-production of notified goods for a continuous period of six days after the departmental seizure and sealing of all pouch packing machines. The statutory scheme under Section 3A of the Central Excise Act, 1944 and Rules 10 and 16 of the Pan-Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 governs abatement for temporary closure and permanent cessation of work. The period in question was not a planned closure by the manufacturer, nor a case of permanent cessation of the factory, but a situation compelled by departmental action. Since the machines were sealed by the officers and the assessee had no control over production during that interval, the demand for duty for that period was held to be unsustainable. The earlier Tribunal view recognising refund in an extraordinary closure situation was followed.

Conclusion: Refund of excise duty for the period of non-production caused by sealing of the machines was admissible, and the department's appeal failed.

Ratio Decidendi: Where non-production of notified goods is directly caused by departmental seizure and sealing of the machines, the manufacturer cannot be denied refund or abatement merely because the interruption lasted for less than the ordinary abatement period.

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