The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the abetment of central excise duty was allowable when the machines of the manufacturer were not engaged in the manufacturing of branded and unmanufactured tobacco for more than 15 days.
Suresh Tobacco Co, the appellant assessee was engaged in the manufacture of branded unmanufactured tobacco without lime tube having the brand name “Suresh Tamaku” and the product bearing the brand name manufactured with the aid of a packing machine and packed in pouches are notified goods under Section 3A of the Central Excise Act, 1944 and the assessee was paying Central Excise duty as prescribed under Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010.
The assessee appealed against the order passed by the Commissioner (Appeals) for rejecting the abetment of excise duty in the form of a refund claim by the assessee.
Rohan Thakrar, the counsel for the assessee contended that out of two machines one machine was not in operation, and this machine was sealed and further pressed that it was never the legislative intent that all the machines working need to be sealed and case there was breakdown of a particular machine only that was to be sealed.
Further submitted that since one machine of the appellant has not worked for 17 days in May, the assessee was legally entitled to a refund of the amount deposited by them in advance.
P. Ganesan, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee had not followed the statutory provisions of Rule 10 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules in the sense that assessee had all the packing machines available in the factory for during the period of abatement and therefore, the abatement claim in the form of refund had rejected.
The Bench observed that the abetment of Central Excise duty was restricted to the situation where the provisions of the notified goods do not take place for 15 days or more and in this case, one of the machines of the manufacturer was not engaged in the manufacture of notified goods for more than 15 days and therefore the assessee was entitled to an abatement of the duty which had been deposited by them in advance at the beginning of the month.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) held that since one machine of the assessee had not worked for 17 days and the assessee was legally entitled to a refund of the amount deposited by them in advance while allowing the appeal filed by the assessee.
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