Custom, Excise & Service Tax Tribunal
M/S. Classic Tobacco Products, Ajmer vs C.C.E. Jaipur-Ii on 19 July, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Appeal No. E/50152/2014-EX(SM)
[Arising out of Order-in-Appeal No. 155/OPD/CE/JPR-II/2013 dated 24.10.2013 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Jaipur].
For approval and signature:
Honble Ms. Archana Wadhwa, Member (Judicial)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Classic Tobacco Products, Ajmer .Applicants
Vs.
C.C.E. Jaipur-II .Respondent
Appearance:
Shri O.P. Agarwal, Advocate for the Applicants Shri Dharam Singh, DR for the Respondent CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Date of Hearing: 19.07.2016 FINAL ORDER NO. 52617/2016-EX(SM) Per Archana Wadhwa:
After hearing both the sides I find that the appellant is engaged in the manufacture of chewing tobacco falling under Chapter 24 of the Central Excise Tariff Act 1985 and during the relevant period was working under the provisions of Chewing Tobacco and Unmanufactured Tobacco Packing Machine (Capacity Determination and Collection of Duty) Rules, 2010. As per facts on record the appellant was working with one machine, though there were total three machines installed in their factory premises. However, the other two machines were lying sealed and the tobacco of Rs.2 MRP per pouch was being manufactured only with one machine. The appellant on 08.11.2011 intimated the Revenue that the said working machine would not be showing any production during the period 10.11.2011 to 30.11.2011 and accordingly requested the Revenue to seal the same, as per the provision of the said rules. The same was sealed on 09.11.2011 and remained sealed till 30.11.2011. As per the further development, one sealed machines was got de-sealed by the appellant on 27.11.2011 and was used for manufacture of pouches of Rs.3 MRP.
2. The appellant claimed abatement in respect of first machine, which was being used for manufacture of pouches of Rs.2 MRP and was lying sealed during the period 10.11.2011 to 30.11.2011, in terms of Rule 10 of the said rules. The Revenue proposed to reject the abatement claim on the grounds that intimation for closure of the machine was given just two days prior to the actual closure whereas the Rules require intimation of 3 days. Further, the abatement claim was sought to be rejected by observing that Rule 10 allows abatement only when the entire factory is closed and not when only one machine is sealed. In as much as the appellant started functioning of their second machine w.e.f. 27.11.2011 it cannot be said that the factory was closed. Further, the Revenue sought to reject the abatement in as much as the appellant claimed the same in terms of section 11B of the Central Excise Act and not under Rule 10 of the Central Excise Act.
3. The said show cause notice issued to the appellant stands culminated into the order passed by the original adjudicating authority denying the abatement and stands upheld by Commissioner (A). Hence the present appeal.
4. After having heard both the sides duly represented by Shri O.P. Agarwal, Ld. Counsel for the appellant and Shri Dharam Singh, DR for the Revenue, I find that the dispute relates to abatement claim of the assessee for the period 10.11.2011 to 30.11.2011. The said claim was filed by the assessee in terms of Rule 10 of the Chewing Tobacco Rules in question. The said rule allows abatement in a case where the factory did not produce the notified goods during a continuous period of 15 days or more. Admittedly, the appellants factory was closed fully from 10.11.2011 to 26.11.2011, when they started using their another machine w.e.f. 27.11.2011. As such it can be seen that the appellants factory was continuously closed for a period of more than 15 days i.e. from 10.11.2011 to 26.11.2011 thus satisfying the condition of Rule 10. The other objection adopted by the Revenue for rejection of abatement claim was sufficient notice of three days in terms of the said Rule 10 does not stand given by the assessee. However, I find that the appellant applied for sealing of the machine on 08.11.2011 and same was sealed by their jurisdictional Central Excise Officers on 09.11.2011 under the orders of the Assistant Commissioner. If the Revenue is sensitive about the three days period, as provided under the said rule they could have sealed the machine after a period of 3 days from 08.11.2011. The fact that the machine was sealed within a period of two days of intimation itself shows that the Revenue is not strict about the fact of three days notice. Otherwise also I find that the issue is no more res integra and stands settled by the Tribunals earlier decision. One such reference can be made to the Tribunals decision in the case of M/s. Rajat Industries Ltd. Vs. CCE 2015-TIOL-423-CESTAT-DEL laying down that the benefit of abatement, if otherwise available, cannot be denied on the technical grounds of the intimation having been given late.
In the present case I find that intimation was admittedly given, the appellants factory was admittedly visited by the officers and the machine was admittedly sealed on 09.11.2011 and admittedly continued to remain sealed during the period 10.11.2011 to 30.11.2011. In such a scenario, the raising of objection by the Revenue cannot be appreciated.
5. I however, find that in terms of Rule 10 the requirement for abatement claim is closure of the factory itself. The appellant started working on their second installed machine w.e.f. 27.11.2011 and with such working factory cannot be held to be closed. As such the complete closure of the factory was only for the period 10.11.2011 upto 26.11.2011. All the other conditions of rule 10 having been satisfied by the appellant I am for the view of the abatement claim of the assessee is required to be given for the period 10.11.2011 to 26.11.2011. The same would be requantified by the adjudicating authority and allowed to the assessee.
6. Appeal is disposed of in the above terms.
[Dictated and pronounced in the open Court]
(Archana Wadhwa) Member (Judicial)
Bhanu
5
E/50152/2014-EX(SM)