2024 (1) TMI 981

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....urer engaged in manufacture of "Notified Goods" i.e. Pan Masala containing Tobacco with one Pouch Packing Machine [PPM]. Appellant was operating by "Compounded Levy" u/s 3A of Central Excise Act 1944 and paying duty under Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008. Appellant deposited duty of Rs. 13,00,000/- for November 2012, in advance for its 1[one] PPM. Appellant Operated PPM only for first 15 days and had filed request earlier for sealing of PPM w.e.f. 16-11-2012, as required under the PMPM Rules. The jurisdictional Central Excise Superintendent of Range had sealed the said PPM on 16-11-2012. Appellant had not operated PPM w.e.f. 16-11-2012 till 30-11-2012 for November 2012 and not produced ....

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....16-11-2012 to 30-11-2012. 2.1 He further submits that only one machine remained continuously under seal w.e.f. 16-11-2012 to 30-11-2012 and Appellant did not produce any Notified Goods. Hence, in absence of manufacture of Notified Goods, differential duty demand is not justified and duty demand with interest deserves to be set aside. In case of "Non production of goods", Rule 10 ibid also provides for "abatement" of duty for a period of 15 days or above in a month. The mandatory requirement of Rule 10 is "non-production" of Notified Goods over 15 days. Since Operating machine remained under central excise seal from 16-11-2012 to 30-11-2012, Appellant had not produced Notified Goods for 15 days of November 2012. He submits that issue is f....

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....be, with a copy to the Superintendent of Central Excise, at least seven days prior to the commencement of said period, who 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 goods shall be effected by the manufacturer : Provided further that when the manufacturer intends to restart his production of Notified Goods, he shall inform to the Deputy Commissioner of Central Excise ....

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.... duty levy is only on "manufacture" of goods by Pouch Packing Machines operated during days in a month. 4.2 In the present case, appellant is eligible for abatement and under no circumstances duty can be demanded for the period of abatement from 16-11-2012 to 30-11-2012, when PPM [Machine] was not in operation and not produced any Notified Goods. This issue has been considered in various judgments. Orders in Thakkar Tobacco - 2016(332)ELT-785(Guj) is followed in 2019(370)ELT-257(All HC)-CCE vs Trimurti Fragrances Pvt. Ltd, it was HELD that Assessee having complied with requirement, entitled to benefit claimed. We find that Order in 2016(332)ELT-785(Guj) is accepted by Circular No. 1063/2/2018-CX dated 16-2-2018[Para 7.1]. Matter is not r....

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....unt of Rs. 5000/-, imposed vide O-I-A dated 31-12-2014. Department had continued litigation even thereafter, which is concluded vide another O-I-A No. RAJ-EXCUS-000-APP-018-2021 dated 25-05-2021 by Commissioner of Central Excise(Appeals). 4.4 Thus, duty demand with interest is not sustainable in such facts of this case, when Appellant has not manufactured any Notified Goods from 16-11-2012 to 30-11-2012. However, we also find that there was a lapse on the part of appellant for removal of goods during closure of PPM from 16-11-2012 to 30-11-2012. Appellant had cleared Notified Goods produced earlier vide Invoice Nos 3571 to 3608, which in our view, is a case for imposing penalty under Rule 27 of Central Excise Rules 2002 on Appellant. Suc....