M/S. Kamal Kishor Jarda Bhandar vs C.C.E. & S.T. Bhopal

[Arising out of Order-In-Appeal No. BPL-EXCUS-000-APP-051-14-15 dated: 03.06.2014 passed by CCE (Appeals)Bhopal]

For approval and signature:

Hon'ble Mr. S.K. Mohanty, 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. Kamal Kishor Jarda Bhandar ...Appellant

Vs.

C.C.E. & S.T. Bhopal Respondent

Appearance:

Mr. Z.U Alvi, (Advocate) for the Appellant

Mr. R K Gupta & R K Mishra, DR for the Respondent

CORAM:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing/ Decision. 29.07.2015

Final Order No. 53246 /2015_

Per S K Mohanty:

Brief facts of the case are that the appellant is engaged in the manufacture of branded unmanufactured tobacco falling under Chapter 2401 of the Central Excise Tariff Act, 1985 with the aid of pouch packing machine. The goods manufactured by the appellant are notified goods, governed under the provisions of Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010, framed by the Central Government vide Notification No. 11/2010-C.E. (N.T.), dated 27.02.2010 issued in terms of Section 3A of the Central Excise Act, 1944. The said rule prescribes the procedures and guidelines, which a manufacturer is required to follow, for manufacture and payment of duty on the notified goods.

1.1 During the disputed period, the appellant had installed one Gutkha Machine in its factory premises. On 11.3.2013, the appellant intimated the Jurisdictional Deputy Commissioner of Central Excise for opening/ unsealing of the machine w.e.f. 18.03.2013, for operating the same for 5 days upto 22.03.2013 and for determining the duty for 25 Gram pouch @ Rs. 4/-, as per Rule 7 of the Said rules. The request of the appellant was acceded to by the Deputy Commissioner, vide his letter dated 12.03.2013 in permitting the installation of the machine w.e.f. 18.03.2013 and directed the appellant to pay the duty for the remaining part of the month from the date of installation. Subsequently, pursuant to the direction of Range Superintendent, the appellant had deposited Rs. 28,50,000/- as Central Excise Duty for the whole month of March (31 Days). Again on 19.03.2013, the appellant had requested the Jurisdictional Central Excise Authorities for sealing the machine w.e.f. 23.03.2013, and the Punchnama to this effect was drawn on the said date.

1.2 The appellant vide its letter dated 25.03.2013, requested the Deputy Commissioner for allowing abatement of duty of Rs. 23,90,322/-, after adjusting duty of Rs. 4,59,078/- for the 5 days operation (i.e. from 18.03.2013 to 22.03.2013). Upon receipt of the said letter from the appellant, the Department issued the SCN dated 30.04.2013 calling upon the appellant to show causeas to why the abatement for Rs. 8,27,419/- shall not be disallowed since the period of closure was from 23.03.2013 to 31.03.2013, which is less than the continuous period of 15 days as provided under Rule 10 of the said rules. The said SCN was adjudicated by the Assistant Commissioner vide his order dated 4.7.2013 wherein the abatement claimed by the appellant was allowed by considering the verification report submitted by the Jurisdictional Range Superintendent, certifying that the machine was closed continuously for the period of 15 days. Feeling aggrieved with the said adjudication order, the Revenue preferred appeal before the Commissioner (Appeals). The Revenues appeal was disposed of by the Commissioner (Appeals) vide the impugned order dated 3.6.2014 wherein, while allowing the appeal of Revenue, the Commissioner (Appeals) has held that since the factory was not closed continuously for a period of 15 days during the month of March 2013, the claim of abatement allowed by the original authority is not proper. Denial of abatement to the appellant is the subject matter of present appeal before this Tribunal.

2. The Ld. Advocate Sh. Z.U. Alvi appearing for the appellant submits that the factory of the appellant was closed continuously for the period from 23.03.2013 till 26.09.2013. According to the Ld. Advocate since the factory did not produce the notified goods for a continuous period of 15 days, the abatement provided in Rule 10 of the said Rules is applicable, which the Adjudicating Authority has rightly granted. It is the further submission of the ld Advocate that the Commissioner (Appeals) has erred in holding that continuous period means the period must related to the relevant calendar month, and it cannot be extended or spill over to the next month. To support his above stand, the Ld. Advocate has relied on decision of this Tribunal in the case of CCE Bhopal vs Kaipan Pan Masala (P) Ltd. reported in 2012 (285) ELT 296 (Tri. Del). He further submits that though this decision was cited before the Commissioner (Appeals), but the same was not considered for allowing the rebate claim on the ground that the said decision has been appealed against before the Honble High Court.

3. Countering the Submissions of the Appellant, the Ld. DR appearing for the Revenue reiterates the findings recorded in the impugned order and submits that since the factory was not closed continuously for a period of 15 days during the month of March, 2013, the abatement has been rightly denied to the appellant.

4. Heard the Ld. Counsel for both the sides and perused the records.

5. The short issue involved in this appeal for consideration by this Tribunal is, whether the Phrase Continuous period of 15 days or more stipulated in Rule 10 of the said Rules would mean period of 15 days of a particular month or the same can be spilled over to the next calendar month, for computation of the period of 15 days. It is an admitted fact on records that the factory of the appellant was closed during the period from 23.03.2013 to 26.09.2013. Though the factory was continuously closed for a period of about 6 months, the Department is of the view that since in the month of March 2013, the factory was closed only for 9 days, the benefit of abatement as provided in Rule 10 shall not be applicable. In this context, I find that the case of the appellant is supported by the decision of the Tribunal in the case of Kaipan Pan Masala (supra), holding that for computation of the period of 15 days, the remaining period in the next calendar month, during which the factory was closed, shall also be taken into consideration. The relevant paragraph of the said decision is extracted herein below:

7.We do not find? merit in above submission. The plea taken by learned DR is mis-conceived and is based on incorrect reading of Rule 10 quoted above. Bare reading of the above quoted Rule would show that as per the Rule, an assessee is entitled to abatement provided there has been no production in the factory for a continuous period of 15 days. The rule nowhere provides that continuous non-production of excisable goods should be during a given calendar month. Admittedly in this case, there was no production in the factory of the assessee for a continuous period of 36 days and all forty Gutkha sealing machines were sealed, therefore, we are of the view that the claim of the respondent for abatement is fully justified under Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 and the order of the Commissioner (Appeals) allowing the abatement cannot be faulted. In view of the discussion above, we do not find any merit in this appeal. The stay application and appeal is, therefore, dismissed in limine.

6. The period of computation of 15 days as provided in Rule 10 of the said Rules has also been discussed by the Honble Allahabad High Court in the case of CCE & ST vs Dharampal Satyapal Ltd. reported in 2013 (298) ELT 484 (All.) wherein, vide paragraph 7 in the said judgment the Honble High Court has held as follows.

7.?A month may be a convenient method for assessment and deposit of excise duty. The respondent applied for abatement since it had deposited excise duty for the entire month of December, 2011. Since only 11 days were falling in the continuous period of closure beginning from 21-12-2011 to 20-2-2012 the respondent claimed for abatement of 11 days for the month of December, 2011. This would not mean that closure was for less than 15 days. The period of 15 days may fall within a month or more than one month, provided it is continuous and that the party complies with other conditions set out in Rule 10 of the Rules of 2008.

7. Considering the position of law enunciated by the Judicial Forums, I am of the view that the appellant shall be eligible for abatement for the period from 23.03.2013 to 31.03.2013, which have been rightly allowed by the Original Authority. In view of above, the impugned order denying the abatement to the appellant is set aside and the appeal is allowed in favour of the appellant.

(Dictated and pronounced in open court)

(S. K. Mohanty) Member(Judicial)

Neha

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