Case Law Details
Commissioner of Central Tax Vs Om Fragrances (Delhi High Court)
Delhi High Court held that the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Second Amendment Rules, 2008 coming into force from 20.10.2008 hence the amendments are not applicable to search conducted prior to effective date.
Facts- The controversy in the present appeal relates to the quantum of duty payable by the respondents. The Tribunal upheld the Order-in-Original dated 30.11.2017 passed by the Principal Commissioner Central Tax (Goods & Services), Delhi (hereafter ‘the Adjudicating Authority’) 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 (hereafter ‘the PMPM Rules’) as in force, prior to the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Second Amendment Rules, 2008 (hereafter ‘the Second Amendment Rules’) coming into force. The Adjudicating Authority as well as the Tribunal had reasoned that the premises of respondent no.1 was searched on 04.08.2008, and the Second Amendment Rules came into force on 20.10.2008.
Conclusion- The duty is required to be calculated by applying the appropriate rate of duty, as specified in the Notification No.42/2008 – E. dated 01.07.2008, to the number of packing machines operating in the factory during that month. However, we are unable to accept that the machinery provision of Rule 17(2) as amended by Second Amendment Rules is operative for searches conducted during the period prior to the amended Rule 17(2) coming into force, that is, prior to 20.10.2008.
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.
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