2003 (7) TMI 559 - AT - Central Excise

Summary

Issues:
Whether abatement of duty is available under Rule 96ZQ of the Central Excise Rules.

Analysis:
In the appeal filed by M/s. Bal Krishna Textile Ltd., the issue revolved around the availability of abatement of duty under Rule 96ZQ of the Central Excise Rules. The appellant processed man-made fabrics and opted for duty payment on a compounded basis under Rule 96ZQ. They closed one of their stenters for a period and informed the authorities accordingly. The Commissioner rejected their request for abatement, citing non-compliance with the pre-deposit condition under Rule 96ZQ(7)(f). The appellant argued that the closure period was prior to the insertion of the clause requiring pre-deposit and referred to a Circular by the Central Board of Excise & Customs stating that abatement should be granted to eligible processors regardless of duty payment status. The appellant contended that they fulfilled the closure notification requirement and that the stenter closure was for a month despite the sealing time discrepancy.

The Senior Departmental Representative upheld the findings in the impugned order during the arguments.

Upon considering both sides, the Tribunal analyzed the relevant provisions. It noted that Rule 96ZQ(7) prescribed conditions for abatement, including notifying closure to the authorities three days in advance. The Revenue did not contest the appellant's compliance with this requirement. The Tribunal emphasized that if the appellant notified the closure, it was the Department's duty to seal the stenter promptly. The stenter remained closed for a month and was desealed accordingly. As a result, the provisions of Rule 96ZQ(7)(f) did not apply. The Tribunal referenced a Circular by the Board, which clarified that eligible processors should receive abatement regardless of duty payment status. Based on this, the Tribunal held that the appellants were entitled to abatement for the specified period without the need for a prior duty deposit. Consequently, the appeal was allowed in favor of the appellant, granting them the abatement of duty for the relevant period.

This detailed analysis of the judgment showcases the interpretation and application of the relevant legal provisions, circulars, and arguments presented by both parties in determining the availability of abatement of duty under Rule 96ZQ of the Central Excise Rules in the case of M/s. Bal Krishna Textile Ltd.