COMMR. OF C. EX. & S.T., DELHI-II Vs. SOM PAN PRODUCTS ALLOYS PVT. LTD.
LAWS(CE)-2015-3-57
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on March 17,2015

Commr. Of C. Ex. And S.T., Delhi -Ii Appellant
VERSUS
Som Pan Products Alloys Pvt. Ltd. Respondents




JUDGEMENT

- (1.)Ashok Jindal, Member (J)
(2.)THE revenue is in appeal against the impugned order wherein demand on interest of Rs. 18,74,131/ - has been dropped by the ld. Commissioner (A). The facts of the case are that respondent is manufacturer of Pan Masala containing Tobacco known as Gutkha. The respondent has 99 FFS machines of Single Track out of which 81 FFS Machines of single MRP Rs. 1 per pouch were operative in the month of January, 2011, i.e., 1 -1 -2011 to 15 -1 -2011 and 18 FFS machines of single track were already sealed and installed. The respondent paid duty for 81 FFS Machines of Single Track at the rate of Rs. 12.5 lakhs per machine in terms of Rule 7 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008. There was no production in the respondent's factory from 16 -1 -2011 till 31 -3 -2011. Therefore, the respondent was entitled for abatement of duty under Rule 10 of the said rules for the period of closure during the month of January, 2011 which was paid in excess. Therefore, the amount of abatement was Rs. 5,22,58,065/ -. The respondent requested for de -sealing and installation of 90 FFS machines of single track of MRP Rs. 1 intended to be used for production from 1 -2 -2011 and same was done. As per Rule 97 of the said rules the respondent was required to pay duty amounting to Rs. 11,25,00,000/ - by 5 -2 -2011 for the month of February, 2011. The Respondent intimated to the Revenue on 2 -2 -2011 that they will utilize the amount of duty of Rs. 5,22,58,065/ - of abatement of excess duty paid during January, 2011 towards duty payable for the month of February, 2011. It was also further requested for adjustment of abatement with the duty payable for the month of February, 2011. The amount of abatement was sanctioned on 4 -5 -2011. Therefore, a show cause notice was issued to the respondent for demand of interest for the period 5 -2 -2011 to 3 -5 -2011 as the respondent has paid less duty in the month of February. Therefore, proceedings were initiated and matter was adjudicated. The demand of interest was confirmed. The Commissioner (A) set aside the demand of interest. Therefore, the revenue is in appeal before me.
The ld. AR appeared on behalf of the revenue submits that in this case abatement was sanctioned on 4 -5 -2011. Therefore, for the period 5 -2 -2011 to 3 -5 -2011 there was no duty credit in the account of the respondent. Therefore, for the intervening period respondent are liable to pay interest. As abatement is similar to the refund, credit of the refund cannot be taken suo motu. Therefore, impugned order is required to be set aside. He also relied on the decision in the case of K.L. Concast (P.) Ltd. v. C.C.E. : 2007 (209) E.L.T. 425 (Tri. -Del).

(3.)ON the other hand ld. Counsel for the respondent submits that there is no provision in the Pan Masala Packing Machine Rules that the respondent is required to make an application for abatement and that abatement is to be granted by department officers. The Provisions of Rule 10 of the said rules specifies that the duty calculated shall be abated but there is no requirement to file application thereon. It is not in dispute that respondent are entitled to claim abatement and it was intimated to the department in advance that in the month of February, 2011 the respondent shall adjust the amount of abatement in duty liability for the month of February, 2011. Further, it is submitted that if there is a shortage of duty for the month of February, 2011 no notice of demand has been issued to the respondent. Consequently, demand of interest is not sustainable. It is further submitted that the demand of interest is barred by limitation also.
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