TaxTMI 
TaxTMI 
2022 (5) TMI 1115
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....2012 PIII/RS/315 /2011 dated 28.10.2011 R-01/C.EX/2011 dated 27.05.2011 E/168/2012 PIII/RS/10 & 11 /2012 dated 24.01.2012 08/C.EX/2011 dated 13.10.2011 E/589/2012 PIII/RS/10 & 11 /2012 dated 24.01.2012 R-02/2011-12 dated 18.10.2011 E/714/2012 PIII/RS/39/2012 dated 13.02.2012 R-03/2011-12 dated 03.11.2011 2.1 Appellant is engaged in manufacture and clearance of Pan Masala not containing tobacco, classifiable under Tariff Item 21069020 of the First Schedule to Central Excise Tariff Act, 1985. They filed the declaration in Form 1 from time to time as per Pan Masala Packing (Capacity Determination & Collection of Duty) Rules, 2008 read with Notification No 30/2008 of the CE(NT) dated 01.07.2008 and Notification No. 42/2008-CE(NT) dated 01.07.2008 as amended for determination annual capacity of production and monthly duty liability to the jurisdictional Assistant/ Deputy Commissioner. Assistant/ Deputy Commissioner determined the said capacity and the Monthly Duty Liability as per the order referred in table below: Order in Original No R-01/C.EX/2011 dated 27.05.2011 A....
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....p; Total Duty Payable (w.e.f 13.10.2011) 385 2.2 Being aggrieved by the above referred orders determining the Monthly Duty Liability, appellants preferred appeals before the Commissioner (Appeals). The Commissioner (Appeals) dismissed these appeals and upheld the order of the adjudicating authority as per the impugned orders referred in para 1 above. 2.3 Aggrieved, appellants have preferred these appeals before the tribunal. 3.1 We have heard Shri Gajendra Jain, Advocate for the appellant and Shri S Anantha Krishnan, Commissioner, Authorized Representative for the revenue. 3.2 Arguing for the appellant, learned counsel submits: • Under the scheme of Pan Masala Rules, the adjudicating authority was only required to determine the annual capacity of production. However, Assistant Commissioner has exceeded jurisdiction by also determining the monthly duty liability. Reliance is placed on the decision of CESTAT in case of Godfrey Phillips India Ltd. Vs. CCE - 2017 (352) ELT 232 (T). • Determination Order dated 18.12.2009 was suo motu revised by the Deputy Commissioner vide Order dated 30.11.2010, whereas as per the....
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.... 4.2 The relevant provisions of the Pan Masala packing Machines (Capacity Determination and Collection of Duty) Rules, 2008, (Notification No 30/2008-CE (NT) dated 01.07.2008 as amended by Notification No 31/2008 CE (NT) dated 15.07.2008, 35/2008-CE (NT), 08/2010-CE (NT) dated 27.02.2010 and 03/2014-CE (NT) dated 24.01.2014 as they were till the amendments made retrospectively by the Finance (No 2) Act, 2014 (25 of 2014) are reproduced below: "TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]GOVERNMENT OF INDIA MINISTRY OF FINANCE(DEPARTMENT OF REVENUE)Notification No. 30/2008- Central Excise (N.T.)New Delhi, the 1st July, 2008 G.S.R. (E).- In exercise of the powers conferred by sub-sections (2) and (3) of section 3A of the Central Excise Act, 1944(1 of 1944), the Central Government hereby makes the following rules, namely:- 1. Short title and commencement. - (1) These rules may be called the Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Rules, 2008. (2) They shall come into force on the 1st da....
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.... : Table Sl. No. Retail sale price (per pouch) Number of pouches per operating packing machine per month (1) (2) (3) 1. Up to Rs. 1.00 37,44,000 2. From Rs. 1.01 to Rs. 1.50 37,44,000 3. From Rs. 1.51 to Rs. 2.00 35,56,800 4. From Rs. 2.01 to Rs. 3.00 35,56,800 5. From Rs. 3.01 to Rs. 4.00 34,44,480 6. From Rs. 4.01 to Rs. 5.00 34,44,480 7. From Rs. 5.01 to Rs. 6.00 34,44,480 8. Above Rs.6.00 33,69,600 Sl. No. Retail sale price (per pouch) Number of pouches per operating packing machine per month (1) (2) (3) 1. Up to Rs. 1.00 62,40,000 2. From Rs. 1.01 to Rs. 1.50 62,40,000 3. From Rs. 1.51 to Rs. 2.00 59,28,000 4. From Rs. 2.01 to Rs. 3.00 59,28,000 5. From Rs. 3.01 to Rs. 4.00 57,40,800 6. From Rs. 4.01 to Rs. 5.00 57,40,800 7. From Rs. 5.01 to Rs. 6.00 57,40,800 8. Above Rs.6.00 56,16,000 (w.e.f 24th January 2014) Explanation . - For the purposes of this rule, if there are multiple track o....
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....ctured including whether pan masala or gutkha or both are to be manufactured, their brand names, etc; ix) retail sale prices of the pouches to be manufactured during the financial year; x) the plan and details of the part or section of the factory premises intended to be used by him for manufacture of notified goods of different retail sale prices and the number of machines intended to be used by him in each of such part or section, to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise: Provided that a new manufacturer shall file such declaration at least seven days prior to the commencement of commercial production of notified goods in his factory. (2) On receipt of the declaration referred to in sub-rule (1), the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, shall, after making such inquiry as may be necessary including physical verification, approve the declaration and determine and pass order concerning the annual capacity of production of the fa....
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.... does not intend to operate shall be uninstalled and sealed by the Superintendent of Central Excise and removed from the factory premises under his physical supervision: Provided that in case it is not feasible to remove such packing 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. (6) In case a manufacturer wishes to make any subsequent changes with respect to any of the parameters which has been declared by him and approved by the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, in terms of sub-rule (2), such as changes relating to addition or removal of packing machines in the factory or making alterations in any part or section of the approved premises or in the number of machines to be used in such part or section or commencing manufacture of goods of a new retail sale price or discontinuation of manufacturing of goods of existing retail sale price, etc., he shall file a fresh declaration to this effect at least three working days in advance to the Deputy Commissioner of Central Excise or t....
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....y amount, if any, shall be paid by the 5th day of the following month: Provided also that in case a manufacturer permanently discontinues manufacturing of goods of existing retail sale price or commences manufacturing of goods of a new retail sale price during the month, the monthly duty payable shall be recalculated pro-rata on the basis of the total number of days in that month and the number of days remaining in that month counting from the date of such discontinuation or commencement and the duty liability for the month shall not be discharged unless the differential duty is paid by the 5th day of the following month and in case the amount of duty so recalculated is less than the duty paid for the month, the balance shall be refunded to the manufacturer by the 20th day of the following month: Provided also that if there is revision in the rate of duty, the monthly duty payable shall be recalculated pro-rata on the basis of the total number of days in that month and the number of days remaining in that month counting from the date of such revision and the duty liability for the month shall not be discharged unless the differential duty is paid by the 5th day of....
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.... on receipt of such intimation shall direct for sealing of all the packing machines available in the factory for the said period under the physical supervision of Superintendent of Central Excise, in the manner that these cannot be operated during the said period: Provided that during such period, no manufacturing activity, whatsoever, in respect of notified goods shall be undertaken and no removal of shall be effected by the manufacturer except that notified goods already produced before the commencement of said period may be removed within first two days of the said period:: Provided further that when the manufacturer intends to restart his production of notified goods, he shall inform to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, of the date from which he would restart production, whereupon the seal fixed on packing machines would be opened under the physical supervision of Superintendent of Central Excise. 11. Retail sale price to be declared on the package.- ...... 12. Determination of retail sale price in case of non- declaration, obliteration, tampering, etc.- ....
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.... list out the salient features of the compounded levy scheme for Pan Masala under Pan Masala Packing Machine (Determination and Collection of Duty) Rules, 2008. Salient features of the scheme areas given below: • Quantity of Pan Masala deemed to be produced by use of one operating packing machine per month is specified on the basis of retail sale price per pouch. Actual production is of no relevance or consequence for payment of excise duty. • In the case of multiple track or multiple line packing machine, each track or line is treated as one operating packing machine for the purpose of calculating quantity of goods deemed to be produced. • Proper officer determined and passed an order concerning the annual capacity of production of the factory. • Number of operating packing machines during any month shall be equal to the number of packing machines installed in the factory during that month. Installation of a machine is relevant and not its actual use. • The machine which the manufacturer does not intend to operate shall be uninstalled and sealed and removed from the factory premises. • Duty p....
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.... sealed by the Superintendent, Central Excise and removed from the factory premises under physical supervision. If it is not feasible to remove such packing machine out of the factory premises, it shall be uninstalled and sealed by the Superintendent, Central Excise in such a manner that it cannot be operated. As per the first proviso to Rule 8, commencing manufacturing of goods of a new retail sale price during the month on an existing machine shall be deemed to be addition to the number of operating packing machine for the month. Proviso two to the said rule also states that non-working of any installed machine during the month, for any reason what so-ever, shall be deemed to be operating packing machine for the month." 4.4 In their submissions the appellants have explained the legal provisions stating as follows: "I Relevant Legal Provisions 1. Statutory provisions governing levy of excise duty on Pan Masala are contained in Section 3A of the Central Excise Act, 1944 read with Notification No 12/2008 CE dated 01.07.2008 and Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 (hereinafter referred to as "P....
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....n addition in the number of operating packing machines for the month. Therefore, if a manufacturer actually commences manufacture of new retail sale price during the month, then the first proviso of Rule 8 can be invoked to deem that there has been an addition in the number of operating packing machines for the month." 4.5 Explaining the case of revenue as per the impugned orders appellant have in their submissions given illustrations as follows: Illustration-1 Machine No. RSP Operative machines as per Appellants Operative machine as per department (by assuming that each machine is capable of packing all RSPs) Machine No. 1 (uninstalled & sealed) Nil Nil Two machines (RSP 2 and RSP 6) Machine No. 2 RSP 2 1 Two machines (RSP 2 and RSP 6) Machine No. 3 RSP 2 1 Two machines (RSP 2 and RSP 6) Machine No. 4 RSP 6 1 Two machines (RSP 2 and RSP 6) Total 3 machines 8 machines (4 machines multiplied by two RSPs) Illustration-2 Machine No. RSP Operative machines as per Appellants Operative machine as per department ....
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....uld be moved out of the factory and used for manufacturing final product, the same should have been taken into account for consideration while fixing duty liability. The Central Excise Authorities had dropped the proceedings initiated on the show cause notice on the ground that since the machines had wheels, even if they were sealed they could be moved out and used for manufacture. 6. The CESTAT dismissed the appeal for the following reasons :- "4. I find no reason to interfere in the impugned order of both the authorities below. Admittedly, the machines are sealed and Revenue's submission is in the arena of assumption and presumption. For using the said machines, the seal has to be broke open which can only be done with the consent and permission of the Revenue. As such, I find no merits in the Revenue's appeal. 5. Accordingly all the appeals filed by the Revenue are rejected." 7. We agree with the reasoning recorded by the CESTAT that once the machines were sealed and there was no evidence that the machines were de-sealed, without which they could not be used for manufacture, the imposition of the excise duty, only on the ground that sinc....
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....; Notwithstanding anything contained in section 11B of the Central Excise Act, an application for the claim of refund of duty of excise under sub-section (3) shall be made within a period of six months from the date on which the Finance (No. 2) Bill, 2014 receives the assent of the President. (5) No act or omission on the part of any person shall be punishable as an offence which would not have been so punishable had the rule referred to in sub-section (1) not been amended retrospectively. THE FOURTH SCHEDULE (See section 109) Provisions of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 to be amended Amendment Date of effect of amendment (1) (2) (3) Rule 8 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008, published vide notification number G.S.R.127 (E), dated the 1^st July, 2008 [30/2008-Central Excise (N.T.), dated the 1st July, 2008] In the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008, in rule 8, for the first proviso, the following proviso shall be substituted with effe....