A Division Bench of the Delhi High Court observed that the excise duty for Ghutka for July and August, 2008 to be computed as per the Pan Masala Packing Machines(PMPM) (Capacity Determination and Collection of Duty) Rules, 2008(PMPM Rules).
The controversy in the present appeal relates to the quantum of duty payable by the respondents, M/s Om Fragrances and Another. The Tribunal upheld the order passed by the Principal Commissioner Central Tax (Goods and Services), insofar as the computation of duty is concerned.
According to the Adjudicating Authority as well as the Tribunal, the duty payable by the respondents, in the facts of the present case, for the months of July and August, 2008 was required to be computed on the basis of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 as in force, prior to the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Second Amendment Rules, 2008 coming into force.
According to the Revenue, the duty for the period of 01.07.2008 to 04.08.2008 was required to be computed on the basis of the machines found at the premises of respondent, that had been in operation since 01.07.2008. And, the duty payable is required to be calculated by applying the appropriate rate of duty as specified in the Notification dated 01.07.2008 (as amended on 20.10.2008) to the number of operating packing machines found at the factory.
The Bench comprising Justices Vibhu Bakhru and Amit Mahajan observed that “In the present case, we are unable to accept that it is implicit in the provisions of the amended Rule 17(2), that it applies retrospectively for purposes for determination of duty in respect of searches conducted prior to 20.10.2008.”
“Undisputedly, for searches conducted after the Second Amendment Rules came into force, the duty would be determined by assuming – unless established to the contrary – that the machines found were operative from 01.07.2008 and by applying the computational provisions of Rule 7 of the PMPM Rules” the Bench concluded.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
