Custom, Excise & Service Tax Tribunal
Cce, Chandigarh-Ii vs M/S Tej Ram Dharam Paul on 20 July, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH 160 017 COURT NO. I Excise Appeal No. 1177 of 2011 [Arising out of Order-in-original No. 01/CE/DC/Abatement/SNG/10 dated 04.05.2010 passed by the Commissioner (Appeals) Central Excise, Chandigarh-II] Date of hearing/ decision: 20.07.2016 For approval and signature: Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. V. Padmanabhan, Member (Technical) 1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether their Lordships wish to see the fair copy of the order? Seen 4. Whether order is to be circulated to the Department Authorities? Yes CCE, Chandigarh-II : Appellant Vs. M/s Tej Ram Dharam Paul : Respondent
Appearance Shri Vijay Gupta, DR for the Appellant Shri Ashwani Sharma, Advocate for the Respondent- assessee CORAM:
Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. V. Padmanabhan, Member (Technical) FINAL ORDER NO. 60990/2016 Per : V. Padmanabhan The present appeal is filed by the Revenue directed against the order-in-appeal dated 22.03.2011 passed by the Commissioner (Appeals), Chandigarh.
2. The appellant is engaged in the manufacture of chewing tobacco and unmanufactured tobacco and is paying duty under the Compounded Levy Scheme. The annual capacity of production of the assessee has been fixed under Section 3A of the Central Excise Act, 1944 in terms of Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010. The Central Excise duty amount determined as payable for the number of operating machines declared by the party for the period 08.03.2010 to 31.03.2010 was paid by the appellant to the tune of Rs. 132.96 lakhs. During the period 08.03.2010 to 22.03.2010 all machines in the factory of the appellants were sealed by the concerned Range Officer and the assessee subsequently claimed abatement of the excise duty paid since no manufacturing activity was carried out during the period. The Deputy Commissioner sanctioned and paid the abatement of duty amounting to Rs. 83,10,483/- vide his order dated 04.05.2010. Revenue filed appeal before the Commissioner (Appeals) challenging the above order on the ground that the assessee did not fulfil the condition of intimating the proper officer regarding the intended closure of the unit atleast three working days prior to the closure, as required under Rule 10 of the Rule (supra). Rule 10 is reproduced below:
Rule 10. Abatement in case of non-production of goods.- In case a factory did not produce the notified goods during any continuous period of fifteen days or more, the duty calculated on a proportionate basis shall be abated in respect of such period provided the manufacturer of such goods files an intimation to this effect with 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, at least three working 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.
The Commissioner vide the impugned order upheld the sanction of abatement by the Deputy Commissioner. In the present appeal the Revenue has sought to set-aside the orders of the authorities below on the ground that the abatement amount will not be payable since one of the conditions prescribed in Rule 10 is not satisfied.
3. Heard the ld. DR Sh. Vijay Gupta for the Revenue and ld. Counsel sh. Ashwani Sharma for the respondent assessee.
4. It is not disputed that the mandatory advance notice regarding the intended closure in the factory was not given atleast three working days prior to the closure. However, the authorities below have recorded that the concerned Range Officer had duly sealed the machine. During the period 08.03.2010 to 22.03.2010, for which the abatement of excise duty has been claimed, there is no allegation of any manufacture having taken place. Hence, it cannot be said that the Revenue has been put to any prejudice by failure to give advance notice as required under Rule 10. The requirement of giving prior intimation of at least three days given in Rule 10 is to give the department sufficient time to reach the premises and seal the machine so that clandestine manufacture and removal of goods does not happen. In the instant case, there is a finding that no such thing has happened. We are of the view that the technical condition of not giving intimation of closure atleast three working days in advance should not be held against the assessee and is not a valid reason for rejecting the claim of abatement.
5. We find that this Tribunal had occasion to consider an identical issue in the case of Rajat Industries Pvt. Ltd. vs. CCE &ST, Kanpur 2015 (320) ELT 146 where the abatement was allowed under similar circumstances. We also note that this order was approved by the Honble Allahabad High court reported as 2015 (325) ELT 579 (All). We find no reason to take a different view in the present case.
6. In line with the above discussion, the appeal of Revenue is rejected.
(Operative part of the order pronounced in open Court) Ashok Jindal Member (Judicial) V. Padmanabhan Member (Technical) Pant 2