TaxTMI 
TaxTMI 
2015 (4) TMI 739
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....appellant company and Shri Chiranjiv Roy Choudhory and Shri J.D. Desai are the Senior Vice President (Technical Services) and Vice President (Purchase) respectively of the appellant company. Shri Naresh Dhir and Shri Amit Singhal are the General Manager (Procurement) and General Manager (Legal) respectively of the appellant company. Shri Rohit J. Shah is the Director of M/s Pakona Engineering (I) Pvt. Ltd. (hereinafter referred to as PKIL), GIDC, Vadodara who has supplied pouch packing machine, which is the subject matter of dispute in this case, to the appellant company. 1.2 The period of dispute in this case is from November 2008 to July 2010. During this period, the appellant company were discharging duty liability in respect of pan masala retail pouches being manufactured by them in terms of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 (hereinafter referred to as PMPM Rules). In November 2008, the appellant purchased a packing machine of model PK-90 GMP FFS machine from PKIL, Vadodara under their invoice dated 26/10/08 and the machinery was received in the factory of the appellant company on 01/11/08. On 03/11/08 the appellant compa....
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....icers that this machine started manufacturing activity on 20th November 2008 and that it was purchased from PKIL, Vadodara and that the appellant company had been paying duty in respect of this machine by treating it at single track machine under PMPM Rules. 1.4 The officers also found that while this machine has been producing 150 pouches per minute of 18 gm. Packs, this speed is double the speed provided for the RSP of above Rs. 6/- per pouch in Rule 5 of the PMPM Rules. On inquiry relating to the specifications of this machine through the website of suppliers PKIL, Vadodara, it was found that this machine has been described by them as Duplex machine with the speed of 180 pouches per minute while the simplex model of this machine produced upto 80 pouches per minute. According to the Department, as per the technical specifications of the supplier PKIL, Vadodara, the machine appeared to be a double track machine which in terms of provision of Rule 5 of the PMPM Rules and of the Notification No. 42/08-CE dated 01/7/08 has to be treated as two machines. It, therefore, appeared that the appellant have evaded duty in respect of the pan masala pouches produced on this mac....
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....ines by whatever name called whether Vertical or Horizontal, with or without caller, single track or multi track or any other type of packing machines used for packing, of pouches of notified goods, that the machine, in question, PK-90 GMP machine is a duplex machine which produces two pouches simultaneously on a single line, that Explanation to Rule 5 of PMPM Rules readwith its proviso and Notification No. 42/08-CE dated 01/7/08 provides that in the case of multiple track or multiple line packing machines, each track or line shall be deemed to be one single packing machine for the purpose of calculation of number of pouches per operating packing machine, unless the multiple track or multiple line machine besides the packing the notified goods, performs additional processes involving moulding and giving a definite shape to such pouches with a view to distinguish the brand or prevent the counterfeiting of the goods, that since no definition of the term multiple track or multiple line packing machine has been given, this term should be construed as it is understood in common parlance, that in multiple track machines there are more than one line or ....
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....anufacture till completion of manufacturing process of the output, is factually incorrect, as in this machine there is only one track or line of travel in which the pouches move in the process of manufacture till the completion of manufacturing process, that the machine, in question, after installation had been inspected by the Jurisdictional Deputy Commissioner and he had accepted the declaration filed by the appellant in form I in terms of Rule 6 of the PMPM Rules, that once the declaration has been accepted vide order No. 6/08 dated 19/11/08,without reviewing this order of the Assistant Commissioner, the matter cannot be reopened and the duty cannot be demanded on the basis that the machine, in question, is a two track machine, and that in any case, there is absolutely no justification for imposition of penalty under Rule 26 on Shri R.J. Shah, Director of the machinery supplier PKIL, Vadodara or on Shri Rajiv Kumar, Managing Director, Shri Chiranjiv Roy Choudhory, Senior Vice President, Shri J.D. Desai, Vice President, Shri Naresh Dhir, General Manager (Procurement) and Shri Amit Singhal, General Manager (Legal & Excise). He emphasised that the machine, in question, ....
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....SP slabs from Rs. 1.51/- to Rs. 2/-, the deemed production per machine per month is 35,56,800 and same is the deemed production per machine per month in respect of the pouches of the RSP of Rs. 2.01/- to Rs. 3/- and so on. For pouches of RSP above Rs. 6/- the deemed production per machine per month is 33,69,600. In terms explanation to Rule 5 readwith its proviso, in case of multiple track or multiple line packing machines, each track or line would be deemed to be in one packing machine unless the multiple tracks are for the purpose of performing additional processes involving moulding or giving a definite shape to the pouches with a view to distinguish the brand or to prevent counterfeiting of the goods. The per month per machine deemed production for various RSP slabs has been specified keeping in view the average speed of the machine and the average number of working hours in a day and average number of working days in a month. Having specified the deemed production per machine per month for the pouches of different RSP slabs, the assessment of duty has not been left to the assessing officers. Instead, Notification No. 42/08-CE dated 01/7/08 issued under Section 3A (4) of the Ac....
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....stion, is a duplex machine and as such there is only one track along which the pouches are formed and are later filled. The only innovation in this machine that on the same line or track at a time, two pouches are cut and filled as a result of which two pouches are formed, filled and sealed resulting in much higher speed of production of pouches. This is clear from the report dated 15/10/10 of IIT Professor Shri S. Sanghi of Applied Mechanical Department and Professor Shri S. Mukherjee of Mechanical Engineering Department of IIT, Delhi. This report also clearly classifies the machine, in question, as a single track duplex machine. In our view there is absolutely no basis for the Commissioner s finding that it is a multiple track machine. Just because the speed of this machine is much higher than the normal machines, it cannot be treated as a multiple track machine. 10. The Rule 5 of the PMPM Rules and Notification No. 42/08-CE dated 01/7/08 distinguish only between the single track and multiple track machines and in a multiple track machine, in certain conditions, each track is to be treated as a separate machine. Since the PMPM Rules or Notification No. 42/08-CE do not define t....