All the manufacturers of Pan Masala are facing great challenge now days. They are forced to pay heavy duty on the basis of capacity of production per machine. As understood, many manufactures of Pan Masala have filed writ petition before the various High Courts challenging the capacity based duty on various grounds and Central Government has filed an appeal before the Supreme Court to transfer all the pending appeals / writ petitions from the High courts to Supreme Court.

In the meantime, Central Government has made the provisions of production based duty more stringent. These provisions are as follows;

Time frame for filing declaration and approval has been reduced substantially. Accordingly, now -

      A declaration for commencement of a new unit is required to be filed at least 7 days in advance (earlier 15 days)

     Superintendent has to approve the declaration in 3days (earlier 5 days)

     Any change in the relation to packing machine is required to be intimated at least 3 days in advance (earlier 15 days)

     Intimation to stop a packing machine to be submitted at least 3 days in advance (earlier 7 days)

     To add or install in packing machine an intimation is required to be submitted at least 3 days in advance (earlier 7 days)

Where a manufacturer ceases to work

     Now a manufacturer who ceases to work is required to surrender his registration (Earlier mere intimation was required)

Non payment of duty as per capacity of production scheme

     If it is found that a duty is not being paid under section 3A, the duty shall be demanded from 1-7-2008 (unless contrary is proved)

Relevant Provisions:

Section 3A of Central Excise Act, 1944

Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Rules, 2008 [as Amended]

Notification No. 45/2008-CE(NT)dated -20-10-2008

Notification No. 29/2008-CE(NT)dated -01-07-2008

Notification No. 42/2008-CEdated -01-07-2008

 

Capacity-based levy tightened: manufacturers face shorter filing windows and mandatory registration surrender under new compliance rules. Capacity-based levy on pan masala manufacture now imposes shorter advance-notice requirements for unit commencement, packing machine changes, stoppages and additions; supervisory approval timelines are compressed; cessation of manufacture requires surrender of registration; and nonpayment under the capacity-based duty regime attracts retrospective demand unless contrary proof is produced, implemented through amended capacity determination rules and notifications.