Custom, Excise & Service Tax Tribunal
M/S Vinayaka Food Products vs Cce, Delhi I on 15 February, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. IV Excise Appeal No. 304 of 2011 (SM) [Arising out of the Order-in-Appeal No. 170/CE/DLH/2010 dated 04/11/2010 passed by The Commissioner of Central Excise (Appeals), New Delhi.] For Approval and signature : Honble Shri Rakesh Kumar, Member (Technical) 1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would 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? 4. Whether order is to be circulated to the : Department Authorities? M/s Vinayaka Food Products Appellant Versus CCE, Delhi I Respondent
Appearance Ms. Seema Jain, Advocate for the appellant.
Shri B.B. Sharma, Authorized Representative (DR) - for the Respondent.
CORAM : Honble Shri Rakesh Kumar, Member (Technical) DATE OF HEARING : 15/02/2013.
Final Order No. 55603/2013 Dated : 15/02/2013 Per. Rakesh Kumar :-
The appellant are a manufacturer of pan masala containing tobacco commonly known as gutkha, chargeable to Central Excise duty. For manufacture of gutkha they had only one machine. The period of dispute is during the months of April 2009 and July 2009 when they were working under Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008. The appellant vide their letter dated 25/3/09 intimated the Jurisdictional Central Excise authorities that they would be closing their factory w.e.f. 4/4/09 and requested for sealing the machine on that day. The Jurisdictional Central Excise officer sealed that machine on 4/4/09 but the remark of the officer does not mention the time of sealing. Similarly, the appellant vide letter dated 23/6/09 informed that they would be closing the factory from 3rd July 2009 and, as such, they would be working up for 2nd July, 2009 and also requested for sealing of the machine. The machine was sealed by the Range Superintendent on 3rd July 2009 and here also, the Superintendents remark regarding sealing does not mention the time of sealing. Subsequently the Assistant Commissioner while determining the abatement of duty, permitted the abatement in the month of April 2009 from 5th April and charged duty for the period from 1/4/09 to 4/4/09 and similarly for the month of July 2009, permitted the abatement from 4/7/09 and charged duty for the period from 1/7/09 to 3/7/09. Thus, the Assistant Commissioner considered the day on which the machine was sealed as the day the machine had worked and charged duty on that basis. This order of the Assistant Commissioner were upheld by Commissioner (Appeals) vide order-in-appeal dated 4/11/10 against which this appeal has been filed.
2. Heard both the sides.
3. Ms. Seema Jain, Advocate, the learned Counsel for the appellant, pleaded that the dispute in this case is only for one day in April 2009 i.e. 4th April 2009 and for one day in July 2009 i.e. 3rd July 2009, that on both the occasions the appellant had given prior intimation regarding closure of the factory in terms of the provisions of Rule 10 of the Pan Masala Packing Rules well in advance, that just because the Jurisdictional Superintendent while sealing the machine on 4th April 2009 and 3rd July 2009 did not mention the time of sealing it cannot be presumed that the machine had functioned on these days, that once the appellant had given the intimation at least three days prior to the closure of the factory, it is for the department to seal the factory in time, that in view of these circumstances, the duty cannot be charged by treating the machine as functional on 4th April 2009 and 3rd July 2009 and, as such, the impugned order upholding the demand for these two days is not correct, that in this regard she relies upon the judgment of the Tribunal in the case of CCE, Indore vs. Sai Pan Products reported in 2012 (281) E.L.T. 580 (Tri. Del.), wherein the Tribunal with regard to the provisions of Pan Masala Packing Rules had held that the day on which the factory was sealed cannot be treated as the day on which the factory had worked, just because the officer sealing the factory did not mention the time of sealing, that similar view has been expressed by Honble Punjab & Haryana High Court in the case of CCE, Chandigarh vs. Dutt Multimetals Ltd. reported in 2010 (254) E.L.T. 461 (P&H), wherein Honble High Court held that intimation of closure/re-start of production to the Jurisdictional Assistant Commissioner would be sufficient compliance of Clause (b) & (d) of Rule 96 ZO (2) of the Erstwhile Central Excise Rules, 1944 and that in view of this, the impugned order disallowing the abatement for 4th April 2009 and 3rd July 2009 is not correct.
4. Shri B.B. Sharma, the learned Departmental Representative, defended the impugned order by reiterating the findings of the Commissioner (Appeals) in it and pleaded that since the machine had been sealed on 4th April 2009 and 3rd July 2009, and the same obviously must have been sealed during day time, it has to be presumed that the unit had functioned during the time prior to the time of sealing and, hence, duty has to be charged for these two days also. He, therefore, pleaded that there is no infirmity in the impugned order.
5. I have considered the submissions from both the sides and perused the records.
6. In terms of the provisions of Rule 10 of the Pan Masala Packing Rules, for claiming abatement the conditions as prescribed in the Rule have to be satisfied and one condition is that the intimation regarding the closure of the factory has to be given at least three days in advance to the Jurisdictional Deputy Commissioner/Assistant Commissioner as well as to the Superintendent and thereafter the Superintendent shall sealed the machine in such a manner that the same cannot be operated. The other condition is that the period of abatement shall not be less than 15 days and that during the period of closure there will be no manufacturing whatsoever of the specified goods whatsoever and no removal of the goods shall be affected by the manufacturer. In this case, there is no dispute that the period of abatement is more than the specified limit and the intimation regarding closure of the factory had been given at least three days in advance. On first occasion, the appellant had intimated on 25/3/09 that they would be closing the factory from 4th April 2009 and on second occasion, on 23/6/09 the appellant had intimated they would be closing the factory from 3rd July 2009. There is also no dispute the machine was sealed on 4th April 2009 and 3rd July 2009. Just because the Superintendents remark regarding sealing does not mention the time of sealing, it cannot be presumed that on 4th April 2009 and 3rd July 2009, the factory had operated. I find that same view had been taken by the Tribunal in the case of CCE, Indore vs. Sai Pan Products (supra). In view of this, the impugned order denying the abatement of duty for 4th April 2009 and 3rd July 2009 is not sustainable. The same is set aside. The appeal is allowed with consequential relief.
(Pronounced in the open court.) (Rakesh Kumar) Member (Technical) PK ??
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