1. This appeal has been filed from the impugned order dated 31.01.2018 passed by the Commissioner (Appeals), Central Excise and CGST, Jaipur. The appellant are engaged in the manufacture of Zarda Scented Tobacco falling under chapter 24 of the first schedule to Central Excise Tariff Act, 1985. They filed the intimation under Rule 17 of Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty), Rules, 2010 for surrender of registration and permanently ceasing to work in respect of machines installed in the factory premises. They also requested for deputation of an officer to seal the pouch packing machines by 29.05.2015. Accordingly the said machines were sealed but they remained in the same premises and the appellant surrendered their registration on 29.05.2015. On 01.06.2015, the appellant applied for new registration for the same premises and for the same manufacturing without making any amendment/changes in the new registration. Although since the same chapters/commodities was also mentioned in their earlier registration therefore there was no requirement to get new registration but still the appellant applied for new registration and started production again w.e.f. 05.06.2015 from the same premises with the same machines.
2. During the month of May 2015 the appellant deposited a amount of Rs. 1,64,22,000/- as duty through internet banking. Since they have surrendered their registration on 29.05.2015 therefore they filed a refund claim under Rule 17 of Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty), Rules, 2010 for refund of duty for remaining days of May 2015 on the ground that they had surrendered their registration permanently and as such they are entitled to claim refund of excess duty paid for the remaining days of the corresponding month on pro-rata basis. Therefore a show cause notice dated 31.08.2015 was issued to the appellant as to why the Refund claim filed under Rule 17 of Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty), Rules, 2010 be not rejected.
3. The adjudicating authority vide Order-in-Original dated 30.10.2015 rejected the refund claim of the appellant under Rule 17 of the said Rules of 2010, and the same was upheld by the ld. Commissioner (Appeals) in the impugned order. I have heard ld. Advocate for the appellant and ld. AR for the Department and perused the records. Rule 17 of Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty), Rules, 2010 which is relevant for deciding the issue is extracted as under:
"17. Factories ceasing to work. - Notwithstanding anything contained in these rules, where a manufacture permanently ceases to work in respect of all the machines installed in the factory and who has filed an intimation of surrender of registration with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise, for the purpose, the duty payable by him for the month in which he so ceases to work permanently shall be calculated on the pro rata basis of the total number of days in the said month and total number of days before the date of receipt of said intimation with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, and he duty paid for the month in accordance with the notification referred to in rule 7 shall be adjusted towards the duty so calculated and on such adjustment, if there is any excess payment, it shall be refunded to the manufacture by the 20th day of the following month and deficiency, if any, shall be payable by him by the 5th day of the following month."
Explanation - For the purposes of this rule, "ceases to work" shall not include a manufacture who ceases to operate his factory for one or two shifts only."
4. The ld. Counsel for the appellant submitted that the appellant has availed refund claim under Rule 17 of 2010 and since the condition of the said Rules were duly fulfilled hence they were entitled for refund. He further submitted that the word "Permanently" as used in the said Rule had not been explained or defined in the said Rules. He also submitted that Rule 17 does not prescribe any bar or restriction on manufacture, on getting new registration after surrendering the earlier registration. According to him the intention of the appellant to cease the operation permanently is explicitly clear when he gets all the machines closed/sealed by the Department and surrendered the Central Excise registration on 29.06.2015 and same is accepted by the Department. In support of his submissions he relied upon the decision of this Tribunal in the matter of M/s. Dhariwal Industries Ltd. v. Commissioner of Central Excise & Service Tax, Vadodara-I reported in : 2015 (330) ELT 639 (Tri.- Ahmd). In which this Tribunal held as under:-
"There is no provision in Rules, 2008 that after declaring permanently ceases to work', the manufacture would not be entitled to re-open his factory. Rule 16 would cover the situation, where, a manufacture filed an intimation to the Deputy Commissioner of Central Excise intimating permanently ceases to work for surrender of registration. There is no bar on re-opening of the factory in Rule, 2008 which is subsequent event............."
5. The ld. AR appearing for the department reiterated the findings recorded in the impugned order and submitted that the appeal filed by the appellant is liable to be rejected.
6. The issue to be decided in this case is whether a refund claim under Rule 17 of 2010 Rules is admissible to the appellant when they had although surrendered their registered certificate but after few days again obtained a new registration and started the same production from the same premises. And also whether the Appellant has fulfilled the conditions of Rule 17 of 2010 Rules.
7. In this matter the appellant although surrendered registration certificate on 29.05.2015 but on 01.06.2015. i.e. only after two days they have again applied for new registration certificate for the same work and with the same machines and in the same premises of factory. This clearly indicates their malafide intention to get the refund of duty which they were not able to claim otherwise in view of the provisions of Rule 10 of the said Rules 2010, wherein the continuous closure of 15 days or more was required for getting refund. Although the word "permanent" or "permanently" has not been defined in the said rules but that does not mean that the closure for two days would be considered as permanent closure or permanently ceases to work. As far as the decision of this Tribunal in the case of Dhariwal Industries Ltd. (supra) is concerned the facts of the matter were different. In that matter the unit had to closed down due to issuance of notification dated 04.02.2011 by the Ministry of Environment & Forest, Government of India banning use of plastic pouches in packaging of Pan Masala and Gutkha with immediate effect. Since in that matter the appellant were unable to continue their production due to said notification, therefore vide letter dated 08.02.2011 they requested for sealing their machine under Rules, 2008 as they close down their factory and the same were sealed on 10.02.2011. But later on the Hon'ble Supreme Court vide order dated 17.02.2011 directed that the aforesaid notification will be effective from 01.03.2011 and therefore the appellants there-in re-opened their factory and pursuant to their application of de-sealing of the machines, the machines were de-sealed on 17.02.2011. Thereafter the appellant filed a refund claim of duty on pro rata basis of the duty paid during period of closure of their factory for 6 days. This shows that in that matter the appellant were forced to close down their factory by virtue of notification dated 04.02.2011 since there was no alternative packing available. Whereas in the present case the appellant without any compulsion requested for surrender of registration and for sealing of their machines and intimated permanently ceasing to work. On their request the same were sealed on 29.05.2015 but only after 2 days i.e. 01.06.2015 they again applied for new registration certificate for the same work with the same machines and in the same premises and requested for de-sealing of machines.
8. I have gone through Rule 17 a
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nd found that as per Rule 17 a manufacture has to permanently ceases to work in respect of machine installed in the factory. Whereas in the present matter the appellant has intentionally surrendered his registration to take benefit of refund under Rule 17 as he intended to close his business for less than 15 days and in such situation abatement under Rule 10 was not allowed to them. Therefore they have intentionally surrendered their registration for taking the benefit of refund of duty under Rule 17 and again after 2 days only, have applied for new registration at the same premises, without making any changes and amendments and started the production with the same machines. 9. Therefore in view of the discussions made herein above the decision of this Tribunal in Dhariwal's Case (supra) as cited by the appellant is not applicable on the facts of this case and the Appellant in not entitled for any refund. The appeal is therefore rejected.