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PJ/Case Laws/2011-12/1296

Abatement under Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008

Case: COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, NASHIK v/s PRAKASH PRODUCTS
 
Citation: 2011-TIOL-958-CESTAT-MUM
 
Issue:- Abatement u/Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 – available where 15 days period for continuous closure overlaps into another month.
 
Brief Facts:- Respondent-assessee were manufacturers of Gutkha falling under Heading No. 24.03 of the Central Excise Tariff Act and operating under compounded levy scheme vide Notification No. 42/2008-CE dated 01/07/2008 read with Notification No. 29/2008-CE(NT) and Notification No. 30/2008-CE (NT) dated 01/07/2008. The compounded levy rate was fixed at Rs. 12.5 lakhs per month taking into account the packing machine employed by the unit.
 
Respondent’s unit remained closed from 01/10/2008 to 03/11/2008 and again from 19/11/2008 to 12/01/2009. Intimation was given to the department. The jurisdictional Assistant Commissioner observed that in the month of November, 2008, the unit was closed from 01/11/2008 to 03/11/2008 and then from 19/11/2008 to 30/11/2008. Therefore, the unit was not closed continuously for a period of 15 days or more in the month of November, 2008 and accordingly he did not allow the abatement sought by the unit under Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008. Accordingly, the abatement claim of assessee was rejected.
 
In appeal, the Commissioner (Appeals) held that the said Rule 10 nowhere prescribes that the unit should be closed continuously for a period of 15 days or more within a calendar month. So long as the unit is closed for the said period at any point of time, whether in the same month or in succeeding months, the assessee would be entitled for the benefit of abatement during the period of closure. Accordingly, the Commissioner (Appeals) held that the assessee was entitled for the benefit of abatement.
 
Hence, Revenue is in appeal against the order of the Commissioner (Appeal).
 
Reasoning of Judgment:- The Tribunal perused the provisions of Rule 10 Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 and held that a reading of the rule makes it very clear that if a unit is closed continuously for a period of 15 days or more the benefit of abatement will be available. It was held that nowhere does the rule specifically stipulate that the closure should take place within a calendar month itself. In the instant case there is no dispute that the unit was closed continuously for a period of 15 days even though the closure overlapped in October-November and again in November -December. That being the factual position, the unit will be entitled for the abatement for the period of closure.
 
Decision:- Appeal rejected.

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