Custom, Excise & Service Tax Tribunal
M/S Shree Flavours Pvt. Ltd vs Cce, Delhi Iv on 7 March, 2014
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. III DATE OF HEARING : 07/03/2014. DATE OF DECISION : 07/03/2014. Excise Stay Application No. 60501 of 2013 in Appeal No. 59779 of 2013 [Arising out of the Order-in-Original No. 04/Commissioner/Fbd/ CX/2013 dated 27/06/2013 passed by The Commissioner, Central Excise, Delhi IV, Faridabad.] For Approval and signature : Honble Ms. Archana Wadhwa, Member (Judicial) 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 Shree Flavours Pvt. Ltd. Appellant Versus CCE, Delhi IV Respondent
Appearance Shri Vivek Kohli, Advocate for the appellant.
Shri Yashpal Sharma, Authorized Representative (DR) for the Respondent.
CORAM : Honble Ms. Archana Wadhwa, Member (Judicial) Honble Shri Rakesh Kumar, Member (Technical) Final Order No. 50958/2014 Dated : 07/03/2014 Per. Archana Wadhwa :-
After hearing both the sides, we find that the appellant is engaged in the manufacture of chewing tobacco and was working under the compounded levy scheme. They started their production w.e.f. 08/09/10 and closed the same on 17/09/10, under due intimation to the Department. As per the provisions of Chewing Tobacco and Un-manufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules 2010, since the appellant was a new unit, they were supposed to discharge their entire duty liability for the month within a period of 5 days from the date of production. As such, they were liable to pay duty for the entire September month on 13/09/10.
2. However, as the appellant had intimated to the Revenue that they are going to close their factory from 17/09/10, they discharged their duty liability for the period 08/09/10 to 16/09/10 on 11/09/10 itself. Their factory remained closed till 22nd October 2010.
3. The issue in the present appeal relates to the abatement, in terms of the said rules referred (supra). The first ground on which the Commissioner has denied the abatement for the period from 17/09/10 to 30/09/10 is that though the factory was closed for a period of more than 15 days, the said closure spread over two months i.e. September and October 2010. He held that in terms of the rules, in question, the continuous closure of 15 days has to be in the same calendar month. In as much as the period of closure in the month of October was around 22 days, he allowed the abatement, but confirmed the demand of duty for the period 17/09/10 to 30/09/10.
4. We find that on the said issue, there are number of decisions of the Tribunal laying down that the period of 15 days closure, need not fall within the same calendar month. It is sufficient if the unit is closed for a continuous period of 15 days, irrespective of the fact that the said period falls within two calendar months. One such reference can be made to the Tribunal decision in the case of CCE, Bhopal vs. Kaipan Pan Masala Pvt. Ltd. reported in 2012 (285) E.L.T. 296 (Tri. Del.). As such, we find no merits in the above reasoning of the Revenue.
5. The Adjudicating Authority has also referred to the fact that in terms of the said rules, the appellant is first required to discharge its duty liability for the entire month and then to claim abatement. The contention of the learned advocate is that in as much as they were a new unit, they were required to discharge their duty liability within a period of 5 days from the date of the production. As the appellant knew that their factory is going to be closed from 17/09/10 and the due intimation was given to the Revenue, they discharged their duty liability on 11/09/10, for the period 08/09/10 to 16/09/10. It is his contention that there are Board Circulars issued in respect of compounded levy schemes on Iron and Steel as also for Textile clarifying that where an assessee knew about the closure of the factory, there was no requirement of first depositing the amounts and then claiming the refund of the same on account of abatement in duty. He submits that the entire exercise is a futile exercise and is Revenue neutral exercise, even though he agrees that the same invite some interest. He further clarifies that the Revenue, vide their letters dated 11/07/11 and 14/07/11 had directed them to pay the interest of around Rs. 1,09,000/- approximately, which they have already paid and are not disputing the same.
6. We agree with the learned advocate on the above issue. The deposits of dues are required to be done by a manufacturer by the 5th of a particular month. It is in this scenario that the Rules required a manufacturing unit to deposit the entire duty for that particular month by 5th day of that particular month. If subsequently the unit is closed, they are given liberty to file abatement and seek refund of duty. However, in a scenario where a manufacturing unit is aware of the closure of its unit, before the duty is deposited by him for the entire month, he may seek abatement at that particular point of time, make deposit of duty for working days only. The non following of the said procedure, may result in confirmation of interest against the assessee, but will not result in denial of the substantive benefit available to him in terms of the rules, in question. As the appellant have already deposited the interest amount and is not contesting the same, we find no justification for confirmation of demand against him for the period of admitted closure of the factory. As such, we set aside the impugned order and allow the appeal itself, with consequential relief to the appellant.
7. Stay petition as also appeal get disposed of, in above manner.
(Dictated and pronounced in open court) (Archana Wadhwa) Member (Judicial) (Rakesh Kumar) Member (Technical) PK ??
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