The Chandigarh bench of the Customs, Excise & Service Tax Appellate Tribunal has held that compounded levy scheme is not applicable on Tin packing machine pouches which are manually packed.
A bunch of appeals were filed against the demand of Central Excise Duty and imposition of penalties. The appellants were engaged in the manufacture and packing of chewing tobacco in pouches and tins falling within tariff item 2403 99 10 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (the Tariff Act).
The dispute was related to the levy of Central Excise Duty on a Compounded basis, under section 3A of Central Excise Act 1944, on certain “Packing Machines” used for the manufacture of chewing tobacco. The appellants who were using these machines in their Unit which according to them do not qualify as “Packing Machines” in terms of the notification No.10/2010-CE (N.T.) dated 27.02.2010.
The Deputy Commissioner informed that all machines including the Tin machines and the manual machines are covered under the Compound Levy Scheme (CLS). In response to the appellant’s response, the Deputy Commissioner vide letter dated 17th March 2010 informed that there was no levy of duty on a compounded basis on the Tin Packing machine and on pouches which have not been packed with the aid of the packing machine.
A Coram consisting of Mr Raju, member (technical), and Mr Ajay Sharma member (judicial), observed that the tin packing was packed manually with the help of hand-operated fillers or similar manually operated device and sealed with heat sealers/band sealers/candles/hot iron and the like.
The revenue has raised the issue of admission of liability before Settlement Commission. The Tribunal didn’t find any case of revenue on merits and set aside the impugned order. The appeals are allowed.
Shri VivekKohli (Sr. Adv.), Shri Ashwini Sharma, Shri Anurag Mishra & Mrs Nisha Bineesh Advocates appeared for the Appellant and Shri Rajeev Gupta, Principal Commissioner, Shri Munish Kumar, Authorized Representative & Shri SaurabhGoel , Special Counsel appeared for the Respondent
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