Custom, Excise & Service Tax Tribunal
Trimurti Fragrance Private Limited vs C.C.E., Delhi Ii on 24 November, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-I Date of hearing/decision:24.11.2015 Central Excise Appeal No.54985 of 2014-Ex (SM) Arising out of the order in appeal No.15/SM/CE/D-II/14 dated 29.4.2014 passed by the Commissioner (Appeals), Central Excise, Delhi II. For Approval and Signature: Honble Mr. Justice G. Raghuram, President 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of 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 Departmental authorities? Trimurti Fragrance Private Limited .. Appellants Vs. C.C.E., Delhi II . Respondent
Appearance:
Present Ms. Seema Jain, Advocate for the appellant s Present Shri Ranjan Khanna, A.R. for respondent-Revenue Coram: Honble Mr. Justice G. Raghuram, President Final Order No.53520/2015 Per Justice G. Raghuram:
Heard the ld. Counsel for the appellant/assessee and the ld. A.R. for the Respondent/Revenue.
2. The appeal is preferred against the order dated 29.4.2014 passed by the ld. Commissioner (Appeals), Delhi II. The impugned order rejected an appeal preferred by the appellant herein against the adjudication order dated 20.9.2013 passed by the Deputy Commissioner, Central Excise, Division VIII, Delhi.
3. The primary adjudication order confirmed appellants liability to interest of Rs.1,64,910/- on account of late remittance of central excise duty by 22 days from July, 2013. This interest component was recovered from the appellant under Section 11AA, by deducting the said amount from the admissible amount of abatement allowed to the appellant.
4. The appellant is a manufacturer of pan masala and chewing tobacco and installed 12 pan masala packing machines. The procedure of installation, operation and remittance of excise duty on the appellant/manufacturer is governed by the Packing Machine (Capacity Determination and Collection of Duty) Rules, 2008 (the Rules). Under Rule 9 of the Rules, monthly duty payable on notified goods shall be paid by the 5th day of same month and intimation in Form-2 is to be filed with the jurisdictional Superintendent of Central Excise before the 10th day of the month. The second proviso to Rule 9 enjoins that if the manufacturer fails to pay the amount of duty by due date, he shall be liable to pay the outstanding amount along with the interest at the rate specified by the Central Government vide notification under section 11AA of the Act on the outstanding amount, for the period starting with the first day after due date till the date of actual payment of the outstanding amount.
5. For July 2013 the appellant admittedly paid duty on 27.7.2013 instead of by the 5th July 2013. According to the appellant it applied for abatement of excise duty under Rule 10 of the Rules for the period including 1.7.2013 to 7.7.2013 (7 days) on 16.8.2013. The abatement was granted by the order dated 20.9.2013. However the interest component of Rs.1,64,910/- was deducted from the component of duty abatement granted thereby.
6. Ld. Counsel for the appellant would strenuously contend that since the appellants twelve (12) pan masala packing machines were inoperative during 1.7.13 to 7.7.13 these should have been considered as uninstalled with effect from 1.7.2013 and reinstalled on 8.7.2013 and on this premise, the third proviso to Rule 9 would be applicable. The third proviso to Rule 9 enacts that in case of increase in the number of operating packing machines in the factory during the month on account of addition or installation of packing machines, the differential duty amount, if any, shall be paid by the 5th day of the following month. On the substratum of this contention, ld. Counsel for the appellant urges that since reinstallation of the packing machines had occurred on 8.7.2013 the liability to remit duty under third proviso to Rule 9 was by 5th August, 2013 and thus there was no liability to interest.
7. Rule 8 obligates a manufacturer to file a declaration in Form1 serial No.5 of the Form I requires intimation of the number of single track packing machines available in the factory; serial No.6 requires intimation as to the number of packing machines which are installed in the factory of the declarant; and serial No.7 requires intimation /specification of the number of packing machines installed, which the manufacturer intends to operate in its factory for production of notified goods. Rule 7 specifies that the duty payable for a particular month shall be calculated by application of the appropriate rate of duty specified in the notification of the Government to the number of operating packing machines in the factory during the month. Rule 8 enjoins that 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 machine for the month shall be taken as the maximum number of packing machines installed on any day during the month. The provisions of Rules 6(4) and 6(5) are also relevant. Sub-rule (4) enacts that the number of operating packing machines during any month shall be equal to the number of packing machines installed in the factory during that month. This provision thus presumes that installed packing machines correspond to operating packing machines and the duty paid or duty payable under Rule 7 is in terms of the installed machines. Sub-rule (5) of Rule 6 however enacts that the machine which the manufacturer does not intend to operate shall be uninstalled and sealed by the Superintendent of Central Excise and removed from the factory premises under his physical supervision; and the proviso thereto states that where it is not feasible to remove such packing machine out of the factory premises, it shall be uninstalled and sealed by the Superintendent of Central Excise in such a manner that it cannot be operated.
8. On true, fair and interactive analysis of the Rules and in particular Rules 6 to 13 the conclusion is irresistible and compelling that where during any period, a manufacturer intimates its intention not to operate a packing machine and the same is sealed by the authorized officers, such machine is deemed have been uninstalled in terms of Rule 6(5). Third proviso to Rule 9 provides that in case of increase in the number of operating packing machines in the factory during the month on account of addition or installation of packing machines, the differential duty amount, if any, shall be paid by the 5th day of the following month.
9. In the facts of this case, the sealing of the 12 machines of the appellant occurred prior to 1.7.2013. The machines were inoperative during 1.7.2013 to 7.7.2013. The machines were unsealed and reinstalled on 8.7.13. This is evident from the abatement order dated 20.9.2013. In the circumstances under the third proviso to Rule 9, the duty was payable by the 5th of August, 2013. Duty was in fact paid on 27th July, 2013. There is therefore no delayed payment of duty warranting levy of interest under Section 11AA of the Act.
10. On the analysis above, the appellant must succeed. The appeal is therefore allowed and the impugned order is set aside but without costs.
(Justice G. Raghuram) President scd/ 1