2023-VIL-972-CESTAT-AHM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Section 11B of Central Excise Act 1944 – Rule 16 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 – Manufacture of pan masala – Closing of factory – Entitlement of refund of duty – Respondent is engaged in manufacture of Pan Masala – Respondent being working under compounded levy scheme paid duty for 25 pouch packing machines (PPMs) installed and in working condition in their factory during month of June 2011 as governed under the Rules – Respondent claimed refund of duty paid in respect of 25 PPMs which were closed and sealed during period from 25-6-2011 to 30-6-2011 – Refund sanctioning authority sanctioned refund to Respondent under Rule 16 of the Rules read with Section 11B of the Act –Commissioner (Appeals) upheld order of lower authority and rejected appeal filed by department – Whether Respondent is entitled to refund of duty for closing down of their factory for disputed period – HELD – Perusal of Rule 16 of the Rules make it clear that in case, a manufacturer cease to work permanently and all machines were sealed on basis of intimation given by them resulting to none of packing machines would be operating, duty if any paid, should be refunded – Respondent is a partnership firm holding valid registration certificate for manufacture of Pan Masala and they have changed constitution of said firm and has converted into Private Limited company with effect from 21-6-2011 – Respondent vide their letter dated 22-6-2011 requested for sealing of all said 25 PPMs w.e.f. 25-6-2011 and which were sealed by Range Superintendent at midnight of 24-6-2011 – On 25-6-2011, Respondent closed down their factory – After change of constitution, new company came into existence and Respondent firm (Partnership firm) has been treated as permanently ceases to works – Revenue gravely erred in contending that factory was not permanently ceased to work, as changed Private Limited Company restarted production – Even if a partnership firm ceased their operation and in place of same a Private Limited Company started operation, both being separate legal entities, it cannot be said that partnership firm has not ceased it’s production permanently – Present case is clearly covered under Rule 16 of the Rules and consequently, Respondent is legally entitled for refund of duty for closing down of their factory for disputed period – Impugned order is upheld and Revenue appeal is dismissed
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