- (1.) We have heard Sri B.K. Singh Raghuvanshi, the learned counsel for the appellant. Central Excise duty is leviable on all excisable goods under Sec. 3 of the Central Excise Act, 1944. Under Sec. 3A(1) of the Act, excise duty is chargeable on such goods based on annual capacity of production in the factory. In exercise of the powers under Sec. 3A(1) of the Central Exercise Act, 1944 the Central Government has notified that pan masala and also pan masala containing tobacco packed in retail packs could be levied for duty under Sec. 3A. Notification No. , dated 1 -7 -2008 was issued framing the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 (hereinunder referred to 'PMPM Rules'). Rule 4 provides that the relevant factor to the production of notified goods shall be the number of packing machines in the factory of the manufacturer. Rule 5 specifies the deemed quantity of notified goods to be produced having a retail price as specified in column 2 of the Table and the number of pouches to be produced in a month per machine. The deemed production per operating machines per month specified in Rule 5 is in respect of retail sale price/different RSP slabs. According to the Table given in Rule 5, Serial No. 1 of column No. 2 specifies the retail sale price per pouch as "up to Rs. 1.00". Column 3 indicates that the number of pouches per operating packing machine per month for retail sale price up to Rs. 1.00 would be 37,44,000/ -. The Table accordingly prescribes different retail sale price per pouch, namely, retail sale price up to Rs. 1.00, from Rs. 1.01 to Rs. 1.50, from Rs. 1.51 to Rs. 2, from Rs. 2.01 and so forth. Rule 5 also provides that if the machines are multiple track or multiple line packing machines, each track or line shall be treated as one machine unless the packing machines besides packing the notified goods in pouches also perform additional process involving moulding and giving a definite shape to such pouches with a view to distinguish the brand or to prevent the counterfeiting of the goods. From the aforesaid, it is clear that when a single line or single track packing machines pertains pan masala pouches having a retail sale price (RSP) up to Rs. 1.00 its deemed production would be 37,44,000 per month per machine.
(2.) In the instant case, the assessee during the month of June, 2009, July, 2009, August, 2009, October, 2009 and November, 2009 filed the declaration as required under Rule 6 declaring its intention to manufacture certain kinds of pan masala pouches. The returns were also filed for these months which showed manufacture/clearances of pan masala with tobacco having RSP of 50 p. On the basis of this information provided by the assessee, the Department inferred that during the each of these months the assessee used the installed machines for manufacturing of pan masala with tobacco of having a retail sale price of Rs. 1 per pouch as well as having a new retail sale price of Rs. 0.50 and, on this basis, invoked the first proviso to Rule 8 of the 'PMPM Rules'. For facility, the said provision, Rule 8 and the provisos are extracted hereunder: - Rule 8. Alteration in number of operating packing machines. - 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. Provided that in case a manufacturer commences manufacturing of goods of a new retail sale price during the month on an existing machine, it shall be deemed to be an addition in the number of operating packing machine for the month: Provided further that in case of non -working of any installed packing machine during the month, for any reason whatsoever, the same shall be deemed to be operating packing machine for the month.
(3.) On the basis of the first proviso, the Department held that the assessees had also commenced manufacturing of the goods of a new retail sale price, i.e., 50 per pouch on an existing machine and, therefore, it would be deemed to be an addition in the number of operating packing machine for the month in question and, accordingly, levied duty. The assessees being aggrieved filed an appeal which was set aside by the Tribunal by an order dated 18 March, 2015 [2015 (329) E.L.T. 680 (Tri. - Del.)]. The Department being aggrieved has filed the present appeal.;