Order date – 22 December 2022

Facts –

• The Appellant, Chandan Tobacco Co, are engaged in the manufacture of Pan Masala and Pan Masala containing Tobacco (Gutka) falling under Chapter Sub–headings No. 21069020 and 24039990 of Central Excise Tariff Act, 1985.
• A show cause notice was issued that the appellant has not paid any Central Excise Duty in respect of the new packing machines added during the relevant month on the ground that the number of old packing machine have been replaced with equal number machines and the total number of installed packing machines remained unchanged during the said relevant months.

Issue –

• Whether the appellant is required to pay duty on replacing old packing machines?

Order –

• The Tribunal held that all the required procedure in replacing the old packing was followed by the Appellant and the same is not under dispute, therefore, the application of Rule 8 does not arise and no duty demand is sustainable in this matter. Therefore considering Rule 10 also the appellants are entitled to abatement.
• In the present case, it is seen that the Appellant after following the proper procedure paid the duty assessed by the Jurisdictional Deputy Commissioner fixing annual capacity of production after the replacement of packing machines, however no action was taken by the department to modify these orders by filing review application or appeal. On this ground also demand is prima facie not sustainable.
• Hence the appeal is allowed.