M/S. K P Pan Products Pvt. Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Original No. 30/COMMR/LKO/CX/2013-14 dated 7.3.2014 passed by Commissioner of Customs, Lucknow (UP)]

For approval and signature:

Hon'ble Mr. Rakesh Kumar, Member (Technical)

Honble Mr Ashok Jindal, Member (Judicial)

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 should 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 Departmental authorities?

M/s. K P Pan Products Pvt. Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

& ST, Lucknow

Appearance:

Shri Rupesh Kumar, Advocate for the Appellants

Shri Pramod Kumar, AR for the Respondent

CORAM:

Hon'ble Mr. Rakesh Kumar, Member (Technical)

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 17.2.2015

ORDER NO. FO/ 50558 /2015-Ex(DB)

Per Ashok Jindal :

The appellant is in appeal against the impugned order confirming the demand of duty of Rs. 7,82,00,000/- and equivalent amount of penalty.

2. The facts of the case are that appellant is manufacturer of Pan Masala containing Tobacco which is known as gutaka under the brand name of Range and Rajashree. On 1.7.2008 vide notification No. 31/08 CE dated 1.7.08 Pan Masala Packing Machines (Determination of Capacity and Collection of Duty) Rules, 2008 were introduced wherein the manufacturer is required to discharge the central excise duty liability on compounded levy basis as per section 3A of the Central Excise Act, 1944. Consequent to that the appellant filed a declaration before the department on 10.7.2008 that the appellant is running 45 machines to manufacture gutka at the retail sale price of Rs.1.50 per piece and three machines manufacturinggutka saleable at the retail price of Rs.One per piece. Thereafter on 11.7.08, he further filed an amendment that three more machines has started functioning which are manufacturing gutka saleable at RSP of Rs.1.5/- per piece. Further he filed a declaration on 15.7.2008 to say 10 more machines has started manufacturing gutka saleable at Rs.1.5 per piece. Consequent to that an order was passed on 17.7.08 which is reproduced as under:

3. On receipt of that order, the appellant filed a representation before the Deputy Commissioner of Central Excise division I Lucknow, UP to say that the calculation done for determining the duty is incorrect and same is required to be rectified. Nothing was replied to the appellant but proceedings were initiated to demand duty as per the order dated 17.7.08. Consequently, impugned order was passed to demand differential duty for the period July, 2008. Aggrieved from the said order, the appellant is before us.

4. After hearing the parties, we find that appeal itself can be disposed of at this stage, therefore, after waiving the requirement of pre-deposit, we have taken up the appeal for final disposal with the consent of both the sides.

5. The contention of the learned counsel of the appellant as per declaration filed by the appellant there were 58 machines which were installed and manufacturing gutka saleable at Rs.1.5 per piece and three machines were manufacturing gutka saleable at the rate of Rs.One per piece, which was wrongly taken up by the adjudicating authority in his order dated 17.7.2008 to say that 61 machines were installed which are manufacturing gutka saleable at the rate of Rs.One per piece and Rs.1.5 per piece and consequently determining the duty liability. That was protested by the appellant but same has not been considered. As a consequence, impugned order has been passed which is based on the wrong facts, therefore impugned order is required to be set aside.

6. On the other hand, learned AR opposed the contention of learned Counsel and submits that appellant has not contested the order dated 17.7.2008 which has attained finality. Therefore they are liable to pay duty.

7. Considering the submissions of both sides, we find that there is an error on record that there are 58 machines installed manufacturing gutka saleable at the price of Rs.1.50 per piece and three machines manufacturing gutka saleable at the rate of Rs. One per piece. But it has been wrongly incorporated in the order of 17.7.2008 that 61 machines are manufacturing gutka saleable at the rate of Rs. 1.5 per piece and Rs. One per piece which resulted in such a huge demand which has been protested by the appellant but same has not been considered by the adjudicating authority while deciding the case. In these circumstances, we find that the order of determination of duty was incorrect. Consequently impugned order is incorrect. In these circumstances, we set aside the impugned order and direct the adjudicating authority to re-determine the duty liability as per the declarations filed by the appellant and consequently pass appropriate order in accordance with the law.

8. With these terms, impugned order is set aside. Appeal is allowed by way of remand. Stay petition is also disposed of in these terms.

(operative part of the order pronounced in the open court )

( Rakesh Kumar )

Member(Technical)

( Ashok Jindal ) Member(Judicial)

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