The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the manufacturer of chewing tobacco and unmanufactured tobacco is required to pay the compounded central excise duty for the periods during which manufacturing machines are in operation.
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 the manufacturer is required to give an intimation to the proper Central Excise officer at least three working days before the commencement of the period for nonfunctioning packing machines, intended to be sealed by the authorities so that the manufacturer was not able to run such machine.
Further submitted that it was a matter of record that out of two machines one machine was not in operation and this machine was sealed and was further pressed that it was never the legislative intent that all the machines working need to be sealed and in case there is a breakdown of a particular machine only that was to be sealed.
P. Ganesan, the counsel for the department relied on the decisions made by the lower authorities and contended that as per provision of Rule 10 of Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, the appellant needed to get both the machines sealed to get the benefit of abatement of above referred Rules and since one machine was in working condition and therefore refund of duty deposited in advance was denied.
The Bench observed that the manufacturer of Chewing Tobacco and Unmanufactured Tobacco was required to pay compounded Central Excise duty for the period from which the machines are in operation in a particular month and the abetment of Central Excise duty was to the situation where the provisions of the notified goods do not take place for the period 15 days or more.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) held that one of the machines of the manufacturer was not engaged in the manufacture of notified goods for more than 15 days and the assessee is entitled to an abatement of the duty which had been deposited by them in advance at the beginning of the month.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
