The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the central excise duty on pan masala as the commencement or discontinuation of retail sale price made only once in particular month.
The Revenue submitted that the appellant, Sanjay Products did not file declaration showing balance stock lying in the factory for the discontinued retail sale price hence, it was not considered as permanently discontinuation of existing retail sale price. Being aggrieved by the order-in-original, the present appeal was filed by the appellant. The Revenue has also filed appeal for non-imposition of penalty under Section 11AC of the Central Excise Act, 1944.
The Counsel for the appellant submitted that the appellant permanently discontinued manufacturing of goods of retail sale price of Rs. 1.00, the officers did not raise any issue and permit to manufacture notified goods of new introduced price of Rs. 1.50 hence, finding of the Revenue is that the appellant manufactured the notified goods of retail sale price of Rs. 1.00 in past prior to February 2011 and therefore, benefit of pro-rata duty to the extent of use of operating machines in a month is not permissible, is miscarriage of justice.
In the present case either commencement or discontinuation of a particular retail sale price was made only once in particular month i.e. in the month of January, 2012 or in April 2012. The Adjudicating Authority has wrongly interpreted the4th proviso to Rule 9 of Pan Masala Packing Machine Rulesto construe that ‘permanently’ discontinuation or commencement of retail sale price means once a new retail sale price is commenced or discontinued the same cannot be re-introduced or discontinued ever in future.
The Bench consisting of Ramesh Nair, Judicial Member and CL Mahar, Technical Member concluded that “We are of the clear view that since in the present case appellant have changed retail sale price either by commencement or discontinuation only once in the month of January, 2012 and April, 2012 it cannot be said that the appellant has not discontinued or commenced the new retail sale price permanently in the respective months.”
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