2017 (10) TMI 1041

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.....50 per pouch. They were paying duty based on the capacity of packing machines installed in their factory as determined under Pan Masala Packaging Machines (Capacity Determination and Collection of Duty) Rules 2008. The dispute involved in this case is the duty liability for one period of Aug 08 and Sep 08 and another period of Oct 2008 and Nov 2008. 3. Rule 5 and Rule 8 of the said Rules are reproduced below:- "5. Quantity deemed to be produced. - The quantity of notified goods, having retail sale price as specified in column (2) of the Table below, deemed to be produced by use of one operation packing machine per month shall be as is equal to the corresponding entry specified in column (3) of the said Table : Sr. No. Retail sa....

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....umber of operating packing machine for the month : Provided further that in case of non-working of installed packing machine during the month, for a reason whatsoever, the same shall be deemed to be operating packing machine for the month." 4. The Appellants had declared that during Aug 08 they had two packing machines in operation and during Sep 08 they had one packing machine in operation. This is not disputed. If these machines are assumed to be manufacturing Pan Masala of only one RSP then the duty liability worked out to Rs. 25,00,000/- for Aug 08 and Rs. 12,50,000/- for Sep 08. This is also not in dispute. The position that they were manufacturing Pan Masala of two different RSPs on the same machine was intimated to the departme....

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....ty Determination and Collection of Duty) Rules, 2008 are not applicable on the facts of the present case, therefore, the impugned orders are to be set aside. 4. On the other hand, learned A. R. for revenue has reiterated the findings of the impugned order. 5. Heard the parties and considered the submissions. 6. I find that the facts of M/s Trimurty Fragrances Pvt. Ltd. (supra) recorded by the Allahabad High Court is as under:- "3. In the instant case, the assessee during the month of June, 2009, July, 2009, August, 2009, October, 2009 and November, 2009 filed the declaration as required under Rule 6 declaring its intention to manufacture certain kinds of pan masala pouches. The returns were also filed for these months which show....

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....existing machine and, therefore, it would be deemed to be an addition in the number of operating packing machine for the month in question and, accordingly, levied duty. The assessees being aggrieved filed an appeal which was set aside by the Tribunal by an order dated 18 March, 2015 [2015 (329) E.L.T. 680 (Tri. - Del.)]. The Department being aggrieved has filed the present appeal." 7. In view of aforementioned set of facts, Hon'ble High Court has observed, as under:- "8. In the light of the aforesaid, the expression "new retail sale price" has to be understood as contemplated under Rule 5 which specifies the deemed production per operating machine per month and this deemed production is specified for different RSP slabs. The rate....