TaxTMI 
TaxTMI 
2017 (6) TMI 1063
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....n 11(1) of the Act. 2. The brief facts of the case are that upon introduction of the Pan Masala Packaging Machines (Determination of capacity and collection of duty) Rules, 2008 (hereinafter referred to as the Rules, 2008), with effect from 01.07.2008 the appellant who was an existing manufacturer of Pan Masala and Gutkha, was having 48, packing machines available in their factory. Further, admitted facts are that 4 packing machines were lying sealed prior to 01/07/2008. Out of the balanced 44 machines, the appellant applied for sealing of 26 machines on 02/07/2008, which were duly sealed by the Central excise authorities on 03/07/2008 at 9:30 AM. The appellant filed the requisite declaration in form-I, under the said rules on 10^t....
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....The Government notified rate of duty per packing machine per month in respect of Pan Masala & Gutkha, and for determining the rate of duty in addition to the number of machine, the factor determining the rate of duty was the Retail Sale Price (RSP). The said Notification further specified the factors for computation of duty payable on the goods and further specified that the number of packing machines for the purpose of computation of the amount of excise duty, specified in terms of the Rules, 2008. It was also brought to notice that in response to the appellants request dated 02/07/2008, 26 packing machines were sealed on 03/07/2008. It was further urged that pursuant to physical verification and supervision of the sealing and uninstalling....
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.... 44 machines were in operating condition in factory premises on 02/07/2008. Therefore, Deputy Commissioner vide his order dated 17/07/2008 approved the installation of 48 machines on 01/07/2008, being the maximum number of machines during the month of July, the Retail Sale Price of the goods was Rs. 1.00 per pouch and that the goods manufactured are Gutkha and Pan Masala. The show cause further states .that the appellant vide the representation dated 24/07/2008 to the Deputy Commissioner with a copy to the Range Office requested for review of the order dated 17/07/2008 for re-determination of the capacity mainly on the grounds that by the amendment vide Notification No.31/2008-CE(NT) dated 15/07/2008, the Rules were made effective fro....
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....sala Packing Machine Rules, 2008 read with Rule 25 of the Central Excise Rules, 2002. 4. The said show cause notice was adjudicated vide the impugned Order-in-Original by learned Commissioner, who was pleased to drop the demand of Rs. 50,00,000/- being demanded on 04 packing machines which were admittedly out of order and sealed prior to 01/07/2008, and further confirm the demand for the balance 44 machines amounting to Rs. 3,25,00,000/- and further pleased to drop the proposed penalty. Being aggrieved, the appellants are before this Tribunal. 5. The learned counsel for the appellant Mr. Amit Awasthi has pointed out that the very basis of show cause notice is wrong and vague. Firstly, it is evident from the order dated 17/....
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....d description, the ex-extent of evasion of duty in regard to such goods or such other factors as may be relevant, is of the opinion that it is necessary to safeguard the interest of revenue, specify, by notification in the Official Gazette, such goods as notified goods and there shall be levied and collected duty of excise on such goods, in accordance with the provisions of this section". Further, Sub-section 2 of Section 3A provides "where a notification issued under Sub-section (l), the Central Government may, by rules - (a) provides a manner for determination of the annual capacity of production of the factory, in which such goods are produced, by an officer not below the rank . of Assistant Commissioner of Central Excise and su....
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....taling 30, there remained only 18 packing machines which were intended to be operated and the said fact have not been found to be wrong or mis-declared by the Department. In this view of the matter, both the order dated 17/07/2008, as well as the impugned order are bad and fit to be set aside. 7. The learned A.R. for revenue have relied on the impugned order. 8. Having considered the rival contentions, we find that the show cause notice is vague and contradictory. There is no allegation in the show cause notice that the declaration dated 10/07/2008 was found to be mis-declared or more number of packing machines were found to be in operation in contrast to the declaration. Further, we find that as alleged in the show ....