TaxTMI 
TaxTMI 
2025 (4) TMI 814
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.... 0 X 0.225 gms. paper mini pouch (Retail sale price Rs.1.00 per pouch) in terms of Notification No.19/2010-CE dated 13.04.2010. During the said month, the appellant purchased one new machine i.e. one single Track FFS machine, namely, PST I and added in the factory during the month of March, 2012 and the said machine has been installed and operated for two days i.e. 13.03.2012 & 14.03.2012 for production of notified goods i.e. Chewing Tobacco without lime tube Tulshi 00 X 25 grms of paper pouch (Retail sale price of Rs.115.00 per pouch) in terms of Notification No.19/2010-CE dated 13.04.2010. All the three machines were in un-operational from 15.03.2012 onwards and there was no production in the factory of the appellant from 15.03.2012 to 10.04.2012 for a continuous period of more than 15 days. On 17.03.2012, the rate of duty was revised on higher side. Therefore, it was alleged by the Department that the amount of duty have to be paid for the entire month notwithstanding un-installation from 15.03.2012 onwards and for the period 17.03.2012 to 31.03.2012 at the increased rate on proportionate basis. Similarly, in respect of one "Rs.115/-RSP machine", the differential duty of Rs.5,35....
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....nst the said order, the appellant is before us. 5. The ld.Counsel for the appellants has pointed out the following submissions : Excise Appeal No.75381/2014 Rule 8 being referred by revenue reads as under Legal Text Remarks 8. Alteration in number of operating packing machines. - In case of addition or installation or removal or uninstallation of a packing machine in the factory during the month, the number of operating packing machines for the month shall be taken as the maximum number of packing machines installed on any day during the month : Provided that in case a manufacturer commences manufacture of goods of a new retail sale price during the month on an existing machine, it shall be deemed to be an addition in the number of operating packing machine for the month : Provided further that in case of non-working of any installed packing machine during the month, for any reason whatsoever, the same shall be deemed to be a operating packing machine for the month. Thus, firstly rule 8 simply comments on number of packing machines and it does not deal with calculation of duty. Secondly the last proviso also does not say that a discontinued....
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....y 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..................... Provided..................... Provided..................... Duty needs to be deposited in advance based on number of machines installed at the start of month and based on prevailing rate. Third Proviso: In case of addition of machines, differential Duty needs to be deposited in next month. Fourth Proviso: This proviso is not applicable in case of addition of machines of existing RSP or part stoppage of existing RSP. However, in case of total stoppage of particular RSP product or addition of altogether new RSP during the month, the Duty liability needs to be recalculated on pro rata basis with consequential refund or differential duty liability to be settled in next month. Further Pro rata calculation under this proviso can be extended for any number of days, even less than 15 days. Fifth Proviso: In case of revision o....
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.....03.2012. Thus 4th proviso to rule 9 needs to be read at the start of 15th March as below. Provided also that in case a manufacturer permanently discontinues manufacture of goods of existing retail sale price................during the month, the monthly duty payable shall be recalculated on the pro-rata basis of the total number of days in that month and the number of days remaining in that month starting from the date of such discontinuation .............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: Thus, on 15^th March duty liability with respect to this machine needs tobe recalculated again as under. • The total number of days in the month of March 2012 = 31 days • Number of days remaining after discontinuance of manufacture = 17 • Therefore, duty liability with respect to this machine shall be reduced by = (17/31)*monthly duty per machine Therefore, the net duty payable for this machine on 5th day of subsequent month shall be effectively calculated for 2 days as under: = Duty ....
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....s. [the sealing report is at pg. 51 of the appeal book]. The production in the factory again started on 11.04.2012 at 00:01 Hrs only. Therefore, in march 2012 itself for the period 15.03.2012 to 31.03.2012 (17 days) the factory did not produce any notified goods and therefore the duty for the period 15.03.2012 to 31.03.2012 for all the three (03) machines stands abated in terms of Rule 10. Excise Appeal No. E/75597/2015 Sr. No. RSP (in Rs.) Number of Machines No. of days of operation of machines in the month of November 2012 Duty deposited (Rs) Appellant stand Short Payment alleged Dep stand Category 1 4 2 30 [01.11.2012 to 30.11.2012] 80,00,000/- Duty deposited for the full month in advance under Rule 9 NIL No dispute Category 2 2 1 11 [20.11.2012 to 30.11.2012] 7,88,334/ - Duty was paid for 11 days on pro rata basis in terms of 4th proviso to Rule 9. 13,61,666/- Duty sought for full month TOTAL 13,61,666/- Calculation of duty on one machine of RSP Rs.2/- under fourth proviso The manufacturing of this new RSP commenced for the fir....
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..../75597/2015, two machines for retail sale price of Rs.4/- per pouch, were in operation for whole of the month i.e. 1st November, 2012 to 30th November, 2012 whereas the appellant has paid the full duty of Rs.80,00,000/- in advance and another machine for retail sale price of Rs.2/- per pouch installed on 20th November, 2012 and operational till 30th November, 2012. 10. As the facts are not in dispute, therefore, the issue is to be decided as under : Issue (1) Whether in the facts and circumstances of the case, the duty shall be payable by the appellant under Rule 8 of Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 or 4th Proviso of Rule 9 of the said Rule, or not ? 11. For better appreciation of this issue, the Rules which are applicable to the facts and circumstances of the case, are extracted below : "Rule 8.Alteration in number of operating packing machines.- In case of addition or installation or removal or uninstallation of a packing machine in the factory during the month, the number of operating packing machines for the month shall be taken as the maximum number of packing ....
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....payable shall be recalculated on the pro-rata basis of the total number of days in that month and the number of days remaining in that month starting from the date of such discontinuation or commencement and the duty liability for the month shall not be deemed to have been 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 leviable under section 3A of the Act, the monthly duty payable shall be recalculated on the pro-rata 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 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 in case it is....
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....ring the said period : Provided that during such period, no manufacturing activity, whatsoever, in respect of notified goods shall be undertaken and no removal of notified goods 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." 12. The issue in these appeals have been dealt by this Tribuinal in the case of Trimurti Fragrances Private Limited Vs. Commissioner of Central Excise, Delhi III reported in 2015 (329) ELT 175 (Tri.-Del.), wherein this Tribunal has observed as under : "8. Rule 9 of the PMPM Rules titled "manner of payment of duty and interest" provides that "the monthly duty payable on notified goods shall be paid by 5....
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....nvoking Rule 8 of the PMPM Rules has taken the stand that since with the installation of 4 new machines on 24-7-2013, the maximum number of operating machines has increased to 25, the duty would be calculated in respect of these machines for the whole month, i.e., duty payable for July 13 in respect of pan masala pouches manufactured would be - "13 multiplied by the rate applicable to MRP of Re. 1 + 4 multiplied by the rate applicable to MRP of Rs. 4". The stand of the appellant is that the duty payable in respect of the 4 new machines installed w.e.f. 23-4-2013 would be subject to the provisions of the Fourth Proviso to Rule 9 and accordingly, in respect of these four machines, duty would be chargeable only for the 8 days from 24-7-2013 to 31-7-2013. 9. Thus, point of dispute is as to whether the Fourth Proviso to Rule 9 would be applicable to Rule 7 read with Rule 8. As discussed above, it is Rule 7 which prescribes the formula for calculation of duty by applying the appropriate rate of duty as specified in the Notification No. 42/2008-C.E. to the number of operating packing machines in the factory during the month, and Rule 8 specifies as to how number of operating pack....
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....f days remaining in that month counting from the date of commencement and duty liability for the month shall be discharged unless the differential duty is paid by him by next 5th of the following month. The appellant in this case had used the four new machines installed w.e.f. 24-7-2013 for manufacture of the pouches of the new RSP - Rs. 4 per pouch, which was not being earlier manufactured by them and, therefore, the provisions of this Proviso would be squarely applicable. Therefore, in respect of these four machines, the duty at the rate applicable for the MRP of Rs. 4 would be chargeable only for 8 days from 24th July to 31st July and not for the entire month. The appellant have discharged duty liability on this basis only. Therefore, we hold that the duty demand of Rs. 1,51,35,483/- confirmed against the appellant on the basis that in respect of these 4 machines, the duty would be chargeable for the whole month, is not sustainable and has to be set aside". 13. Further, this issue was also examined by this Tribunal in the case of S.A.Freshners Private Limited Vs. Commissioner of Central Excise, New Delhi reported in 2018-TIOL-1026-CESTAT-DEL, wherein this Tribunal has held as....
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.... of Rs. 2/- MRP for the whole month and duty shall be payable accordingly. As the period of assessment is month to month and admittedly the appellant have not manufactured notified goods of Rs. 2/- MRP from 1st to 9th July, accordingly, for the month of July 2010 their case is manufacture of Rs. 2/- new MRP notified goods and duty is required to be calculated as provided in Rule 9 (4) proviso of the said rules. I also find that a Division Bench of this Tribunal in Trimurti Fragrances Pvt. Ltd. (supra) in the case of claim for abatement for the period of closure of the factory when the appellant paid the proportionate duty for the period factory was in operation and Department contended that appellant should have paid entire duty for the month and only thereafter should have claimed rebate. This Tribunal held as follows:- "9. Thus, point of dispute is as to whether the Fourth Proviso to Rule 9 would be applicable to Rule 7 read with Rule 8. As discussed above, it is Rule 7 which prescribes the formula for calculation of duty by applying the appropriate rate of duty as specified in the Notification No. 42/2008-C.E. to the number of operating packing machines in the factory d....
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....lity shall be recalculated pro rata on the basis of total number of days in that month and the number of days remaining in that month counting from the date of commencement and duty liability for the month shall be discharged unless the differential duty is paid by him by next 5th of the following month. The appellant in this case had used the four new machines installed w.e.f. 24-7-2013 for manufacture of the pouches of the new RSP-Rs.4 per pouch, which was not being earlier manufactured by them and, therefore, the provisions of this Proviso would be squarely applicable. Therefore, in respect of these four machines, the duty at the rate applicable for the MRP of Rs. 4 would be chargeable only for 8 days from 24th July to 31st July and not for the entire month. The appellant have discharged duty liability on this basis only. Therefore, we hold that the duty demand of Rs. 1,51,35,483/-confirmed against the appellant on the basis that in respect of these 4 machines, the duty would be chargeable for the whole month, is not sustainable and has to be set aside". 14. Again, in the case of Arora Tobacco Private Limited Vs. Commissioner of Central Excise & Service Tax, Jaipur I reported....