2004 (3) TMI 592 - AT - Central Excise

Summary

Issues:
Interpretation of Rule 96ZQ(7)(f) of the Central Excise Rules, 1944 regarding abatement on closure periods exceeding a calendar month.

Detailed Analysis:

1. Interpretation of Rule 96ZQ(7)(f):
The dispute in this case revolves around the interpretation of Rule 96ZQ(7)(f) of the Central Excise Rules, 1944 concerning the payment of duty under the compounded levy scheme. The appellants claimed abatement due to the closure of their mill for specific periods. The Commissioner interpreted the provision to require payment for periods exceeding a calendar month, leading to the rejection of abatement claims.

2. Commissioner's Interpretation:
The Commissioner held that abatement must be considered for a block period of one month. For instance, in the case of a stenter closed from 1-7-1999 to 2-8-1999, the abatement for the entire month of July was allowed, but duty for August was required as the closure was less than a month. A similar approach was taken for other stenters, resulting in the rejection of abatement claims.

3. Appellant's Grievance:
The appellants contested the rejection of abatement claims for closures not exceeding a month. They argued that the phrase "period of one month" in the rule should be interpreted as a continuous period of one month or more, not strictly a calendar month. They emphasized that the rule lacked an explanation requiring closure to align with calendar months for abatement eligibility.

4. Judgment and Legal Basis:
The Tribunal found the Commissioner's interpretation lacking legal basis. It noted that the rule did not explicitly require closure periods to align with calendar months for abatement eligibility. Referring to a previous decision, the Tribunal emphasized that a continuous period of one month or more should be considered for abatement, regardless of calendar month alignment. Consequently, the Tribunal allowed the appeal and set aside the impugned order.

This detailed analysis highlights the core issue of interpreting Rule 96ZQ(7)(f) and the contrasting perspectives of the Commissioner and the Tribunal, ultimately leading to the Tribunal's decision in favor of the appellant's interpretation.