2010 (5) TMI 459

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....f the appellants as well on respondent. 2. The appeal arises from order dated 21st May, 2009 passed by the Commissioner, Jaipur whereby excise duty amounting to Rs. 4,06,45,161/- has been confirmed against the appellants along with interest thereon and penalty of Rs. 40 lakhs. 3. The appellants are engaged in the manufacture of Panmasala and Gutkha falling under Tariff item 2106 and 2403 of the Schedule in the Central Excise Tariff Act, 1985. The appellants opted for payment of duty under Compounded Levy Scheme w.e.f. January, 2008 under Notification No. 38/2007-C.E., dated 29-12-2007 and choose to pay central excise duty of Rs. 12 lakhs per machine per month for manufacturing Gutkha with retail sale price up to 1.50 grams....

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.... machines installed for packing of the goods in his premises and fix the rate of duty per packing machine per month based on retail sale price printed on such pouches as specified herein below :-   Sl.No. Retail sale price (per pouch)   Rate of duty per packing machine Per month (Rs. In Lakh)   (1) (2) (3)     Pan Masala Pan masala Containing Tobacco     (a) (b) 1 Upto Rs. 1.50   10 12 2 From Rs. 1.51 to Rs. 2.00   12 16 3 From Rs. 2.01 to Rs. 3.00   20 26 4 From Rs. 3.01 to Rs. 4.00   23 31 5 From Rs. 4.01 to Rs. 5.00   29 38 6 From Rs. 5.01 to Rs.....

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....fication in question. There is nothing in the said notification which permits working out of any deemed M.R.P. in respect of goods cleared for export. Being so, the basis whatsoever for the manner in which the demand has been worked out is thoroughly incorrect. According to the appellants, the concept deriving R.S.P. where no R.S.P. is printed has been for the first time introduced under Notification No. 42/2008-C.E. and 30/2008-C.E. (N.T.) w.e.f. 1st July, 2008 and the same cannot be retrospectively applied to the appellants' case and, hence, the appellants have made out prima facie case for grant of stay of the impugned order and waiver of the amount demanded. 9. On the other hand, it is the case of the respondents that the appel....

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..... it cannot be disputed that prima facie the appellants were manufacturing pouches of 2 gms. with retail sale price of more than Rs. 2.01, they were liable to pay the duty at the rate of Rs. 26 lakhs per packing machine per month. Undisputedly, they were only paying Rs. 12 lakhs per machine per month. It obviously discloses short payment. Considering the same we do not find any prima facie case having been made out for waiver of entire demand under the impugned order. 11. At the same time, prima facie, it cannot be disputed that there is no concept of deemed RSP or MRP under the said notification. However, notification clearly refers to the weight of each pouch for the purpose of determining the rate of duty. Once it is established....