TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 25
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.... Rules 2010), under Notification No.11/2010-CE(NT), dt.27.02.2010 as amended. The Appellants had paid duty as per Rules 2010 and availed the benefit of abatement of duty in case of non-production of goods during any continuous period of 15 days or more, in terms of Rule 10 of the said Rules 2010. According to the Revenue, the abatement in Rule 10 is not automatic or suo motu and it is in the nature of refund and the Appellants are required to pay the duty as determined under Rule 9 of the said Rules 2010 by 5th day of the same month. Thereafter, Department would allow the abatement after following the administrative procedure of pre and post audit. By the impugned orders, the Adjudicating authorities confirmed the demand of duty alongwith interest and imposed penalty on the Appellants. 3. The learned Advocates on behalf of the Appellants drew the attention of the Bench to the relevant portion of the Rules 2010. They submit that the Rules 2010 is an independent provision for determination of the capacity of production and collection of duty. It is submitted that the Rule 10 of the said Rules 2010 read with Proviso to Section 3A(3) of the Central Excise Act, 1944, had allowed the As....
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....e 10 would show that it is mandate to the Department to determine the abatement of duty. The Assessee has no right to take benefit of abatement suo-motu. It is different from the words "the Central Government being exempts" in the general exemption notification, where the Assessee may avail exemption suo motu. iii) Section 3A(1) of Central Excise Act, 1944 clearly stipulates that Rules 2010 was framed to safeguard the interest of Revenue to the extent of evasion of duty. Taking into consideration the object of framing of the Rules 2010, as envisaged under Section 3A(1) of the Act, it may clearly be construed that as per Rule 10, the Appellant cannot be permitted to avail suo motu abatement. He referred to Para 5 of the decision of Hon'ble Supreme Court in the case of Commissioner of Central Excise, Chandigarh Vs Doaba Steel Rolling Mills - 2011 (269) ELT 298 (SC) in the context of object of Section 3A(1) of the Act, 1944. 5. After hearing both the sides and on perusal of the records, we find that the Central Government framed the Rules 2010 in exercise of the powers conferred by sub-sections (2) and (3) of Section 3A of the Act, 1944. It is a self-contained and independent Rule f....
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.... said Rule 10, there is no such provision. In this regard, it is seen that in the case of Sri Padma Balaji Steels (P) Ltd Vs CCE Coimbatore - 2009 (246) ELT 255 (Tri-Chennai), the Tribunal held as under:- " The claim of the assessees for abatement on the ground that the factory was closed for 9 days and 10 days respectively during the period 18-5-98 to 27-5-98 and 17-6-98 to 27-6-98 has been rejected by the Commissioner on the ground that since closure was for a period of less than one month, the assessee ought to have paid duty liability and then sought abatement, in terms of Rule 96ZO of the Central Excise Rules, 1944. 2.We have heard both sides and perused the rule in question and find that there is no such stipulation contained therein. Even in case of Rule 96ZQ, where there is such a condition prescribed, the Tribunal has held in the case of Varun Silk Mills P. Ltd. v. CCE, Surat, 2007 (214) E.L.T. 227 (Tri.-Ahmd.) that abatement benefit is a substantial benefit which cannot be denied only on the ground that the assessee did not pay duty first and then claim abatement. In the absence of any such condition in Rule 96ZO, which is relevant rule in the present case, the benefit....
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....ard has decided that the Commissioners should decide first whether the processor was otherwise eligible for abatement or not. In case he is eligible and he had not paid the duty, the abatement should be granted without asking him to pay duty first or where he had paid the duty, he should be reimbursed the amount of duty paid, in terms of the order of abatement issued by the Commissioner." It is seen that the situation obtaining in the present appeals is quite akin to situation dealt with in the above circular dt.28.02.1999. The Adjudicating authority has refused to follow the ratio of the said circular on the ground that the said circular was issued only for the period 16.12.1998 to 27.02.1999. While the Commissioner is technically right in his observation, it needs to be pointed out that the period (upto 27.02.1999) was mentioned in the said circular only because the said Rule was amended w.e.f. 28.02.1999. In the case of Steel Industries of Hindustan Industrial Area Vs CCE Ghaziabad - 2013 (293) ELT 191 (All.) while interpreting Rule 96ZP of the erstwhile Central Excise Rules, the Allahabad High Court observed that there is no pre-condition for depositing of duty for claiming ab....
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....sealed condition during the month and the Tribunal held that the abatement under said Rule 10 cannot be given in respect of individual machines. Thus, this judgment is not relevant to the present appeals. The reference was also made by ld.D.R. to the case of K.P. Pan Products Pvt.Ltd (supra) but the issue there was whether the continuous period of 15 days of closure of the factory should necessarily fall during a particular calendar month and the Tribunal held that the said period of 15 days of continuous closure could fall in the two adjacent months also. Thus, this judgment is of no avail to the Revenue. As regards the Board's circular dt.12.03.2009 stating that the abatements are subject to pre/post-audit, we do not necessarily see any fatally irreconcilable contradiction between the Board's circulars dt.15.09.1999 & 30.08.1997 on the one hand and the one dt.12.03.2009 on the other in as much as when the adjustment of abatement has been made, nothing prevents Revenue froma auditing the correctness thereof. More importantly, the Board's circulars have no statutory force and have to be ignored to the extent they are in conflict with the judicial pronouncements. 9. It is quite ev....
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....e calculated by the manufacturer for a month as per rate of duty specified in the notification, to the number of operating packing machines in the factory during the month. In case a manufacturer permanently discontinues manufacture of existing retail price or commences manufacture of goods of new retail price, the duty will be recalculated, and, if the duty is paid more than the amount so recalculated, the balance shall be refunded to the manufacturer by the 20th day of the following month. 9. In the above legal position of Rule 2010, it is seen that the proviso to Section 3A(3) of the Act, 1944 extended benefit to abate the duty calculated on a proportionate basis for non-production of goods during any continuous period of 15 days or more. The relevant portion of the said proviso to Section 3A(3) is reproduced below:- "Provided that where a factory producing notified goods did not produce the notified goods during any continuous period of fifteen days or more, the duty calculated on a proportionate basis shall be abated in respect of such period if the manufacturer of such goods fulfils such conditions as may be prescribed." 10. Rule 10 of Rules 2010, which is the subject matt....
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.... calculated on a proportionate basis shall be abated", in Rule 10, if read with prefix words "in case a factory did not produce the notified goods during any continuous period of fifteen days or more" would make it clear that the duty calculated by the manufacturer as per Rule 7 of the Rules 2010, shall be reduced on a proportionate basis in case of non-production of goods for the period as specified therein. The Rule 10 of the said Rules 2010 further makes it clear that the duty calculated by the manufacturer shall be reduced on a pro-rata basis in case of non-production of goods "provided the manufacturer of such goods files an intimation to this effect to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be". The learned Counsels for the Appellants categorically stated that they have filed an intimation as required under the Rule and declared the availment of the abatement of duty in their monthly returns ER-1 from time to time. It is further contended that the Show Cause Notices were issued on the basis of scrutiny of the ER-1 returns. On a query from the Bench, the learned Advocates submit that th....
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....nd to debit the amount calculated at the rate of Rs. 400/- per metric tonne at the time of clearance from the factory in the account-current maintained under Rule 173G(1) of the Central Excise Rules, 1944, and the duty liability is to be complied as detailed in Clauses I and II under Rule 96ZP of the Rules." 13.1 The learned Special Counsel strongly relied upon the decision of Hon'ble Supreme Court in the case of Priya Blue Industries (supra) and Flock (India) Pvt. Ltd (supra). In the case of Flock (India) Pvt. Ltd (supra), the Hon'ble Supreme Court observed that the earlier adjudication order, determining classification of goods was not challenged despite it is appealable. Such order cannot be questioned by filing refund claim on the ground that the Adjudicating authority has committed an error in passing earlier order under the provisions of Rule 173(B) of erstwhile Rules, 1944. In the case of Priya Blue Industries (supra), the Hon'ble Supreme Court in the context of refund claim under the Customs Act, observed that once an assessment order is passed, for clearance of the goods, the duty would be payable as per that order, unless that order has been reviewed under Section 28 of ....