TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 16
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....of India in the Ministry of Finance (Department of Revenue), No.42/ 2008-CE, dated the 1st July, 2008 to the number of operating packing machines in the factory during the month. Rule 9. Manner of payment of duty and interest.- The monthly duty payable on notified goods shall be paid by the 5th day of same month and an intimation in Form - 2 shall be filed with the Jurisdictional Superintendent of Central Excise before the 10th day of the same month: Provided that monthly duty payable for the month of July, 2008 shall be paid on or before 15th day of July, 2008: Provided further that if the manufacturer fails to pay the amount of duty by due date, he shall be liable to pay the outstanding amount along with the interest at the rate specified by the Central Government vide notification under section 11AB of the Act on the outstanding amount, for the period starting with the first day after due date till the date of actual payment of the outstanding amount: Provided also that in case of increase in the number of operating packing machines in the factory during the month on account of addition or installation of packing machines, the differential duty amount, if any, shall be....
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....h duty was last paid by him or the total number of packing machines found available in his premises at any time thereafter, whichever is higher: Provided also that in case a new manufacturer commences production of notified goods in a particular month, his monthly duty payable for that month shall be calculated pro-rata on the basis of the total number of days in the month and the number of days remaining in that month starting from the date of commencement of the production of such notified goods and shall be paid within five days of such commencement. (ii) Whether the Hon'ble CESTAT has erred in not taking cognizance that neither the party is a new manufacturer nor they have changed their Retail Sale Price (RSP) of 05 machines, which were used for the manufacture of Gutkha of MRP of Rs. 2.00 during the month of November, 2012. During the month of November, 2012, the parety operated the following machines for 12 days (i.e. 19.11.2012 to 30.11.2012) * 06 Pouch Packing Machines of Gutkha of MRP Rs. 1.00; and * 05 Pouch Packing Machines of Gutkha of MRP Rs. 2.00. As per Notification No. 42/ 2008-CE, dated the 1st July 2008 read with Rule 7 of the Pan Masala Packing Machin....
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..... (iv) When the Apex Court in the case of State of Jharkhand & Others vs. Ambey Cement & Anr. [ 2004(178) ELT 055(SC)], has held that it is a cardinal rule of the interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way. (v) When the judgment of the Hon'ble High Court, Delhi relied on by the CESTAT in the instant case in the case of CCE vs. Shakti Fragrances Pvt. Ltd. [2015(324) E.L.T. 390] does not appear to be identical to the instant case. (vi) Whether, in view of the provisions of Rule 7 & 9 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty), Rule, 2008 and aforementioned rulings by Apex Court, the confirmation of demand & recovery of the short paid duty amounting to Rs. 1,08,00,000/- for the month of November, 2012 alongwith interest and penalties should have been upheld by the Hon'ble CESTAT? 3. On 19.9.2019, learned counsel for the appellant was permitted to add the following substantial question of law, which reads as under: "1). Whether in view of the provisions of Rule 9 and Rule 10 of the Pan Masala Packing Machine (Capacity Determi....
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....1. The Department was of the opinion that assessee started manufacturing Gutkha on new retail price, i.e., MRP of Rs. 1.00 during November, 2012, hence, duty on the same was payable on pro-rata basis, but, since Gutkha of MRP Rs. 2.00 was not a new retail price, hence duty on the same was payable for the entire month and not for a period of 12 days provided under Rule 10 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty), Rules, 2008 (hereinafter called as "PMPM Rules, 2008"). The Superintendent, Central Excise through letters dated 4.3.2013 and 12.3.2013 required the assessee to deposit the central excise duty of Rs. 1,08,00,000/-. The said letters were replied by assessee, but a show cause notice was issued on 25.9.2013 proposing for recovery of excise duty of Rs. 1,08,00,000/- along with interest and penalty. The said show cause notice was adjudicated by Commissioner vide order dated 29.9.2014 confirming the proposed duty along with interest and equal amount of penalty under Rule 17 of PMPM Rules, 2008 read with Section 11AC of the Central Excise Act. Further, penalty of Rs. 5000/- was imposed under Rule 27 of the Central Excise Rules, 2002 for co....
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....8,00,000/-. 14. Learned counsel for the Department further submitted that Rule 10 of PMPM Rules,2008 provides for abatement in the case of non-production of notified goods and abatement is subject to condition stipulated therein and the assessee cannot on his own calculate the excise duty and set off the same against the duty payable under Rule 9 of the PMPM Rules, 2008. 15. Sri Agarwal submitted, that settled principle of law is that once the statute requires to pay tax within stipulated period then such payment is to be made within that period, otherwise it would render the provision redundant and nugatory. 16. Replying the averments made by counsel for the Department, Sri Nishant Mishra, learned counsel appearing for the respondentassessee submitted that sub-section 3 of Section 3-A of the Central Excise Act provides that if a factory producing notified goods did not produce the same during any continuous period of 15 days or more, duty calculated on proportionate basis shall be abated in respect of such period, subject to conditions as may be prescribed. 17. Rule 10 of the PMPM Rules, 2008 provides condition for abatement, i.e. if a manufacturer files intimation with the De....
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....nder sub-section (3) of section 3A of the Act, which would be allowed by an order passed by the Commissioner of Central Excise of such amount as may be specified in such order. Similarly, sub-rule (7) of rule 96ZQ provides for abatement being allowed by an order passed by the Commissioner of Central Excise of such amount as may be specified in such order, subject to the conditions enumerated thereunder. Similarly, sub-rule (2) of rule 96ZP provides for abatement being allowed by an order passed by a Commissioner of Central Excise of such amount as may be specified in such order subject to the fulfillment of the conditions laid down thereunder. Thus, in relation to independent processors of textile fabrics, manufacturers of non-alloy steel hot re-rolled products and manufacturers of non-alloy steel ingots, who were also assessed on the basis of annual production capacity under section 3A of the Act, there was an express provision for making an order of abatement whereas the PMPM Rules are totally silent in that regard. There is no provision for making an order of abatement under rule 10 of the PMPM Rules. 13. As noticed earlier, rule 10 of the PMPM Rules provides for abatement o....
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.... be said that the said action is contrary to the statutory scheme. When the rules do not provide for the manner in which duty is required to be abated, nor do they provide that abatement shall be by an order of the Commissioner or any authority, but nonetheless provide for abatement of duty and the extent of entitlement to such abatement, no fault can be found in the approach of the assessee in suo motu taking the benefit of such abatement." 20. Sri Mishra also placed reliance upon circular issued by the Ministry of Finance (Department of Revenue) Central Board and Excise & Customs, New Delhi dated 16.2.2016 wherein the Department has accepted the judgment of the High Court of Gujarat in case of M/s Thakkar Tobacco (supra). Relevant portion of the circular No.1063/2/2018-CX dated 16.2.2018 is extracted hereunder: "7.1 Department has accepted the aforementioned order of the Hon'ble High Court of Gujarat where the Hon'ble Court dismissed the departmental appeal on the question of law, whether manufacturer has the option of suo-moto abatement of duty in the event of closure of factory for a continuous period of 15 days or more without first depositing the duty in terms of rule 10 o....