DHARIWAL INDUSTRIES LTD. Vs. COMMISSIONER, CENTRAL EXCISE & SERVICE TAX
LAWS(CE)-2015-8-7
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on August 13,2015

Dhariwal Industries Ltd. Appellant
VERSUS
Commissioner, Central Excise And Service Tax Respondents




JUDGEMENT

P.K.DAS,MEMBER (J) - (1.)THE relevant facts of the case, in brief, are that the Appellants were engaged in the manufacture of Gutkha and Pan Masala, classifiable under Chapter Heading No. 24039990 and 21069020 respectively of the Schedule to Central Excise Tariff Act, 1985.
(2.)These items were covered under Compounded Levy Scheme as notified goods by Notification No. , Dt. 01.07.2008 issued under Section 3A of Central Excise Act, 1944, and the procedure was framed under Pan Masala (Packing Machine Capacity Determination & Collection of Duty) Rules, 2008 (in short Rules, 2008). They were discharging duty liability as per determination of annual capacity of production under Rules 2008. By judgment Dt. 07.12.2010, the Hon'ble Supreme Court ordered a complete ban on use of plastic pouches in packing of tobacco, gutkha etc w.e.f. 01.03.2011. The Appellant discharged the duty liability for the month of February 2011 within the stipulated period as per Rules 2008. It came to their knowledge that the Ministry of Environment & Forest, Govt. of India, issued the Notification S.O.S. No. 249 (E) Dt. 04.02.2011 banned use of plastic pouches in packaging of Pan Masala and Gutkha with immediate effect. The Appellant was unable to continue their production and therefore, by letter Dt. 08.02.2011, they informed the jurisdictional Assistant Commissioner, Central Excise & Customs, with a request for sealing their machines as required under Rules 2008 as they closed down their factory. Accordingly, the Superintendent of Central Excise, Vadodara, on 10.02.2011, sealed the machines installed in the Appellant's factory. Subsequently, the Hon'ble Supreme Court by order Dt. 17.02.2011 directed that the notification will be effective from 01.03.2011. Hence, the Appellants re -opened their factory and pursuant to their application for de -sealing of the machines, the machines were de -sealed on 17.02.2011. The Appellants filed a refund claim of duty on 29.06.2011 on pro -rata basis of the duty paid during period of closure of their factory for 6 days.
A show cause notice Dt. 15.05.2012 was issued proposing to reject the refund claim, as it is contrary to Rule 10 of the Rules 2008, insofar as the period qualifying for abatement should be any continuous period of 15 days or more. The Adjudicating authority rejected the refund claim. By the impugned order, Commissioner (Appeals) rejected the appeal filed by the Appellant and upheld the Adjudication order.

(3.)THE learned Advocate on behalf of the Appellant submits that due to notification Dt. 04.12.2011 of the Ministry of Environment & Forest, the Appellant was compelled to close down their factory and the Superintendent of Central Excise on 10.02.2011 sealed the machines. However, as per the direction of Hon'ble Supreme Court, the factory was re -opened on 17.02.2011 and the jurisdictional Central Excise Officers de -sealed the machinery. Thus, there is no manufacturing operation during the closure period from 10.02.2011 to 16.02.2011 and the Appellants are entitled to get the refund of duty as paid by them on pro -rata basis. He drew the attention of the Bench to various provisions of Rules 2008. He also relied upon the various decisions of Hon'ble Supreme Court, High Court and Tribunal.
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