2002 (2) TMI 545 - AT - Central Excise

Summary

Issues involved:
Abatement of duty under Section 3A(3) of the Central Excise Act read with Rule 96ZO(2) of the Central Excise Rules.

Detailed Analysis:

1. Abatement Claim for Factory Closure:
The appeal by M/s. Ram Shree Steels (P) Ltd. concerns the abatement of duty due to factory closure. The Appellants claimed abatement for the period when the factory remained closed, supported by reasons such as the factory closure due to electricity supply disconnection and sealing of the electric meter. The Appellants argued that they followed proper procedures and cited a similar case where abatement was allowed under comparable circumstances. The Appellants emphasized the technical nature of the procedure and substantial compliance with the abatement conditions.

2. Compliance with Procedural Requirements:
The Appellants contended that they duly informed the authorities about the closure of the factory, despite challenges in providing the electricity meter reading due to the seal by the Electricity Board. They also highlighted the installation of a new meter after the theft of the original one. The Appellants asserted that they substantially complied with the requirements of Rule 96ZO(2) for abatement eligibility.

3. Furnace Capacity Reduction and Declaration:
The Appellants sought permission to reduce the capacity of one furnace and eventually dismantled the second furnace, which was not part of the current proceedings. They clarified the communication with the Department regarding the furnace changes and the mistake in filing the abatement claim for a later period.

4. Revenue's Counterarguments:
The Revenue argued against the abatement claim, emphasizing the mandatory nature of the conditions under Rule 96ZO(2) for abatement eligibility. The Revenue contested the Appellants' compliance with the procedural requirements, especially regarding the closure and restart intimation, and the absence of electricity meter readings. The Revenue also questioned the validity of the theft claim concerning the electric meter.

5. Judgment and Conclusion:
The Tribunal analyzed the submissions from both sides and interpreted the provisions of Section 3A(3) and Rule 96ZO(2) concerning abatement conditions. The Tribunal found that the Appellants substantially complied with the closure intimation requirements despite challenges in providing the electricity meter reading due to the sealed meter room. The Tribunal acknowledged the installation of a new meter and the subsequent restart intimation. Consequently, the Tribunal ruled in favor of the Appellants for abatement eligibility from the closure date to the new meter installation date. However, the Tribunal upheld the Revenue's decision regarding the later abatement claim due to a bona fide mistake of law. The Tribunal advised the Appellants to seek other reliefs through proper channels if necessary.

In conclusion, the appeal was disposed of based on the findings related to abatement eligibility during the factory closure period, emphasizing substantial compliance with the procedural requirements outlined in the Central Excise Rules.