2002 (12) TMI 484 - AT - Central Excise

Summary

Issues involved:
Interpretation of Rule 96ZO(3) of the Central Excise Rules, 1944 regarding abatement of duty before payment, applicability of Section 3A(3) of the Central Excise Act, and reliance on Board circulars for abatement claims.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved a dispute regarding the requirement of depositing Central Excise duty before claiming abatement by a manufacturing company. The Revenue contended that the company, which manufactured non-alloy steel ingots, had not paid the full duty amount as required under Rule 96ZO(3) and issued a show cause notice for the differential duty. The Deputy Commissioner confirmed the demand and imposed a penalty, but the Commissioner (Appeals) set aside the Adjudication Order.

The Senior Departmental Representative argued that the company was obligated to pay duty in two equal instalments as per Rule 96ZO(3) and could not unilaterally curtail the duty amount. Reference was made to Circulars No. 331/47/97-CX and No. 485/51/99-CX to support this argument. However, the Advocate for the Respondent contended that Section 3A(3) of the Central Excise Act allowed for duty abatement if the factory remained closed for a continuous period, citing the case of Karamyogi Dyeing Pvt. Ltd. and Circular No. 485/51/99-CX.

Upon considering the submissions, the Tribunal analyzed the provisions of Section 3A(3) and Rule 96ZO, emphasizing the conditions for duty abatement in case of factory closure. The Tribunal concluded that the company could not unilaterally claim abatement before paying duty, disagreeing with the decision in the Karamyogi Dyeing case. However, as Section 3A was no longer in effect, the matter was not referred to a Larger Bench. The Tribunal directed the Commissioner to decide on the eligibility of the company for abatement claims within two months, emphasizing that if no duty was found to be short-paid, the company would not be liable to pay any duty. The Tribunal concurred that no penalty was warranted in this case.

In conclusion, the appeal was disposed of with the directive for the Commissioner to promptly assess the abatement claims, highlighting the importance of fulfilling conditions before claiming duty abatement and the necessity for proper procedural compliance in such matters.