2004 (2) TMI 606 - AT - Central Excise

Summary

Issues:
- Appeal against Order-in-Original allowing abatement claim under Central Excise Act.
- Compliance with Rule 96ZO(2) for abatement claim.
- Dispute over meter reading and closure intimation.
- Justification of abatement claim by the Commissioner.
- Restart of production affecting abatement eligibility.

Analysis:

The appeal before the Appellate Tribunal CESTAT, New Delhi involved a dispute regarding the abatement claim under the Central Excise Act. The Revenue challenged the Order-in-Original allowing the abatement claim of M/s. Shatabdi Steels Pvt. Ltd., the respondents. The core issue revolved around the compliance with Rule 96ZO(2) for the abatement claim, specifically concerning the closure intimation and meter reading requirements.

The learned DR for the Revenue argued that the abatement claim should be rejected due to non-compliance with Rule 96ZO(2). The respondents, manufacturers of M.S. ingots, had claimed abatement for the period of factory closure. The Revenue contended that the closure intimation and meter readings were not provided as mandated. They cited previous legal decisions to support their stance on the importance of strict compliance with procedural conditions for duty abatement.

In response, the respondents' advocate highlighted that the factory closure was due to the disconnection of power by the Electricity Department, preventing them from accessing the meter room for readings. They presented a certificate from the Executive Engineer, Electricity Board, confirming the power disconnection and the inability to record meter readings due to sealed meter rooms.

Upon considering the arguments, the Tribunal examined the provisions of Section 3A(3) of the Central Excise Act and Rule 96ZO(2) regarding abatement conditions. It noted that the respondents had informed about the factory closure and stock details but were unable to provide meter readings due to the sealed meter room, as confirmed by the certificate. The Tribunal found merit in the respondents' submissions, stating that they were justified in granting the abatement of duty based on the circumstances.

However, the Tribunal ruled that the abatement would not apply to the date of production restart, 18-5-99. Despite allowing the abatement claim for the closure period, the Tribunal held that the respondents were not eligible for abatement on the date of production resumption. Consequently, the appeal filed by the Revenue was rejected, affirming the Commissioner's decision to grant abatement to the respondents while excluding the abatement for the production restart date.