2003 (9) TMI 608 - AT - Central Excise

Issues Involved:
1. Admissibility of claims of abatement of duty under Rule 96ZO(2) of the Central Excise Rules, 1944.
2. Compliance with intimation requirements to the Assistant Commissioner and Range Superintendent.
3. Calculation of the period of factory closure for abatement eligibility.

Detailed Analysis:

1. Admissibility of claims of abatement of duty under Rule 96ZO(2):
The core issue in these appeals is the admissibility of abatement claims under Rule 96ZO(2) of the Central Excise Rules, 1944. The Appellants, M/s. Young Steel Pvt. Ltd., argued that their factory closures entitled them to duty abatement. However, the Deputy Commissioner allowed abatement for only 8 out of 173 days claimed, citing non-compliance with Rule 96ZO(2) conditions. The Commissioner (Appeals) upheld this decision, leading to the confirmation of duty demand and penalty.

2. Compliance with intimation requirements to the Assistant Commissioner and Range Superintendent:
Case 1:
The Appellants claimed factory closure from 6-5-1998 to 13-5-1998 but sent intimation to the Range Superintendent on 7-5-1998 and to the Assistant Commissioner on 9-5-1998. The learned DR argued that intimation must be given to both offices either prior to or on the date of closure. The Tribunal agreed with the DR, stating that the factory remained closed for less than seven days, disqualifying the abatement claim.

Case 2:
For the period 16-5-1998 to 23-5-1998, the Appellants sent intimation to the Assistant Commissioner on 16-5-1998 by registered post and to the Range Office on 19-5-1998 after holidays. The Tribunal, referencing the Sree Sai Baba Concast P. Ltd. case, held that the intimation was proper and effective from the date of closure, granting abatement for the claimed period.

Case 3:
For the period 7-8-1998 to 18-8-1998, the Appellants sent intimation to the Range Office on 7-8-1998 and to the Assistant Commissioner on 8-8-1998 by registered post. The Tribunal ruled that the factory remained closed from 8-8-1998, granting abatement from 8-8-1998 to 17-8-1998.

Case 4:
For the period 20-8-1998 to 3-9-1998, the Appellants sent intimation to the Range Office on 20-8-1998 and to the Assistant Commissioner on 21-8-1998 by post. The Tribunal allowed abatement from 21-8-1998 to 2-9-1998, as intimation to the Assistant Commissioner is mandatory.

Case 5:
For the period 1-10-1998 to 2-2-1999, the Appellants sent intimation to the Range Office on 5-10-1998 after holidays and to the Assistant Commissioner on 3-10-1998 by post. The Tribunal granted abatement from 5-10-1998 to 1-1-1999, rejecting the claim for the earlier period due to delayed intimation.

Case 6:
For the period 26-2-1999 to 8-3-1999, the Appellants sent intimation to the Range Office on 26-2-1999 and claimed to have sent it to the Assistant Commissioner by post the same day. The Tribunal accepted the Appellants' claim, granting abatement from 26-2-1999 to 7-3-1999, considering the possibility of the intimation being lost in transit.

3. Calculation of the period of factory closure for abatement eligibility:
The Tribunal emphasized that abatement of duty is available only if the factory remained closed for a continuous period of not less than seven days, as per Section 3A(3) of the Central Excise Act and Rule 96ZO(2). The Tribunal meticulously calculated the closure periods, considering the dates of intimation and recommencement of production, to determine the eligibility for abatement.

Conclusion:
The Tribunal's judgment involved a detailed examination of compliance with intimation requirements and the calculation of closure periods. The Appellants were granted partial abatement based on proper intimation and continuous closure periods, while claims with delayed or improper intimation were rejected. The judgment underscores the importance of strict adherence to procedural requirements for duty abatement under the Central Excise Rules.

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