2004 (6) TMI 543 - AT - Central Excise

Summary

Issues:
Challenge to demand of duty and penalty based on abatement claim due to factory closure for more than 15 days.

Analysis:
The case involved a challenge by M/s. Steel Industries of Hindustan against the demand of duty and penalty imposed by the Commissioner Central Excise (Appeals) under Section 3A of the Central Excise Act. The Appellants claimed abatement of duty due to their factory closure for more than 15 days during the relevant period. The Appellants argued that they were eligible for abatement under Sub-section (3) of Section 3A read with Rule 96ZP of the Central Excise Rules, 1944. They contended that they had filed abatement claims with the competent authority and that the duty demand was not justified as their abatement claim was pending. The Appellants relied on legal precedents to support their argument that duty liability should be decided after assessing the abatement claim. However, the Respondent argued that duty had to be paid first, and abatement could be claimed subject to fulfilling prescribed conditions. The Respondent emphasized that the Appellants could not unilaterally deduct abatement amounts before paying duty. The Tribunal noted that duty payment was required by the 10th of each month, and abatement was subject to specific conditions under Rule 96ZP(2). The Tribunal held that the Appellants could not self-avail abatement and must deposit the full duty amount as determined. The Tribunal reduced the penalty but upheld the duty demand, stating that the Appellants had not fulfilled their duty liability and could seek a refund upon abatement approval.

In summary, the judgment addressed the issue of duty and penalty demand challenged by M/s. Steel Industries of Hindustan based on their abatement claim due to factory closure for more than 15 days. The Tribunal clarified that duty payment was mandatory, and abatement could only be claimed after meeting specified conditions and approval by the Commissioner. The Appellants were directed to pay the full duty amount determined and could seek a refund upon abatement approval. The penalty was reduced, considering the case's circumstances.