2003 (4) TMI 454 - AT - Central Excise

Summary

Issues:
Claim for abatement of duty under Rule 96ZO(2) for non-operation of induction furnace on specific dates due to closure and the requirement of intimation to the authorities in compliance with Clause (a) of Rule 96ZO(2).

Analysis:
The appellants were engaged in manufacturing non-alloy steel ingots under the Compounded Levy Scheme of Rule 96ZO. They applied for abatement of duty for periods when their induction furnace was closed. The Commissioner partially allowed the claim but denied for specific dates due to late intimation of closure. The issue revolved around the timely intimation requirement under Clause (a) of Rule 96ZO(2).

The appellants argued that they closed the furnace on a Friday evening and informed the Range Officer on the following Monday due to holidays on Saturday and Sunday. They cited a similar case and a Trade Notice allowing telegraphic intimation during holidays. The Department contended that someone would be available during holidays to receive intimation, without providing any pre-existing guidelines.

The Tribunal examined the situation, noting the absence of procedural guidelines before the Trade Notice in August 1999. As per Rule 96ZO(2), closure should be intimated on the day or the previous day. The appellants claimed the closure was due to breakdown, which was not refuted. Since no specific procedure existed for holiday situations, the intimation on the first working day after the holidays was considered compliant. Relying on the cited case law, the Tribunal allowed the abatement claim for the disputed dates, setting aside the Commissioner's decision.

In conclusion, the Tribunal allowed the appeal, granting abatement of duty for the specified days when the furnace was non-operational due to closure. The decision emphasized substantial compliance with the intimation requirement under Rule 96ZO(2) in the absence of specific guidelines for holiday situations, following precedent and setting aside the Commissioner's order.