TaxTMI 
TaxTMI 
2021 (5) TMI 605
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....o mention about the machine which was made un-operational why could not be removed for certain reasons, although the same machine was made un-operational, at a later stage with a report of the officer of the department that "looking to the heaviness of the machine, not possible to remove', could be considered to be a substantial compliance of sub-rule (5) of R.6 of Rules, 2010" [3] This question arises in following background facts which are recorded from Central Excise Appeal No. 1/2018. Since facts are similar in both the appeals, they are not separately recorded as arising in Ce. Excise Appeal No 2/2018 : The appellant assessee is a manufacturer of Jarda Scented Tobacco falling under Chapter 24 of the Central Excise Tariff Act, 1985. In terms of Section 3A of the Central Excise Act, 1944 read with Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 (hereinafter to be referred to as "the Rules of 2010") the assessee was liable to pay excise duty on the installed capacity of manufacture instead of actual manufacture and clearance of goods. [4] The appellant had installed one machine in its factory which was sea....
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....e sealing the packing machines in one case, categorically mentioned that the machine is sealed in such a manner that it cannot be operated. But in the other report, it has not been mentioned categorically. Thus, there is a distinction between the two reports mentioned above. The ld. Counsel on behalf of the appellant argued that the sealing of the machines would show that it cannot be operated. Further, it is contended that there is no material on record that the sealed machine was operated. I am unable to accept the contention of the ld. Counsel for the appellant. I find that the report dated 19.10.2015 is inconsonance with the provisions of proviso to Rule 6(5) of the Rules, 2010. In the other report, there is no indication that it cannot be operated. Hence, I agree with the findings of the Commissioner(Appeals). The ld. Counsel referred to various case laws. None of the case laws are relevant in the facts and circumstances of the present case." [7] Appearing for the appellant, learned senior counsel Mr. A K Sharaf took us to the provisions of the said Rules of 2010 and in particular, sub-rule (5) of Rule 6 thereof. He also drew our attention to the proceedings drawn by the Insp....
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....s to power of Central Government to charge excise duty on the basis of capacity of production in respect of notified goods. Sub-section (1) of Section 3A provides that notwithstanding anything contained in Section 3 where the Central Government having regard to the nature of the process of manufacture or production on excisable goods of any specified description, the extent of evasion of duty in regard to such goods or such other factors as may be relevant, he 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 the said Section, which essentially envisages collection of excise duty on annual capacity of production. [11] To operationalize this scheme, the Central Government has framed the said Rules of 2010. Rule 10 of the said Rule pertains to abatement in case of non-production of goods. Relevant portion of Rule 10 reads as under: "In case a factory did not produce the notified goods during any continuous period of fifteen days or more, the duty calculated on a proportiona....
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....eals) to enable the assessee to claim abatement of duty. It appears that the department has also accepted this order of the Commissioner(Appeals). [14] However, for the remaining period, the claim of the assessee is rejected on the ground that the sealing order did not specify that it was sealed in such a manner that the machinery cannot be operated. We may recall, sub-rule (5) of Rule 6 provides that the machine which the manufacturer does not intend to operate shall be uninstalled and sealed by the Superintendent of Central Excise and removed from the factory premises under his supervision. However, the proviso to sub-rule (5) envisages that in case it is not feasible to remove such machine out of the factory premises, it shall be uninstalled and sealed by the Superintendent of Central Excise in such a manner that it cannot be operated. The fact that the machine is too heavy to be removed was recorded by the Superintendent of Central Excise in his order dated 19th October, 2015. Being the same machine, the situation for a different period, would not change. [15] It is true that the proviso in such a case requires that the machine should be uninstalled and sealed by the Superint....