2004 (8) TMI 519 - AT - Central Excise

Summary

Issues:
1. Interpretation of proviso of subsection (3) of Section 3A regarding duty abatement for factory closure.

The judgment by the Appellate Tribunal CESTAT, Mumbai involved the interpretation of the proviso of subsection (3) of Section 3A in a case where a factory was closed for a period of less than 15 days. The appellant, a textile manufacturer, sought abatement of duty for the period his hot air stenter was closed for 12 days. The key question was whether abatement could be granted for closures less than 15 days. The appellant argued for eligibility for abatement, while the Commissioner (Appeals) contended that no abatement should be given for closures under 15 days. The Tribunal upheld the Commissioner's stance, ruling that no abatement could be granted for closures lasting less than 15 days.

The appellant operated under the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 2000, manufacturing textile fabrics under specific chapters of the Central Excise Tariff Act, 1985. The appellant requested the sealing of the hot air stenter on 13-2-2001, which was sealed on 16-2-2001 as per Rule 96ZQ of the Central Excise Rules, 1944. The duty levy scheme based on annual production capacity was in effect until 28-2-2001 and was withdrawn from 1-3-2001 onwards. Consequently, the officers broke the seal upon rule withdrawal. The Tribunal noted these facts as the background of the case.

The Tribunal deliberated on the proviso of subsection (3) of Section 3A, which allows duty abatement for factories not producing notified goods for 15 consecutive days or more. The appellant argued for abatement despite a 12-day closure, while the Commissioner (Appeals) opposed abatement for closures below 15 days. The Tribunal sided with the Commissioner, emphasizing that no abatement could be granted for closures lasting less than 15 days. Consequently, the appeal was rejected based on this interpretation of the statutory provision.

In conclusion, the Tribunal's judgment clarified that duty abatement under the proviso of subsection (3) of Section 3A was not applicable for factory closures lasting less than 15 days. The ruling upheld the Commissioner (Appeals)'s position, denying the appellant's claim for abatement despite the stenter closure lasting only 12 days. The decision underscored the strict application of the statutory provision, emphasizing the requirement of a continuous closure period of 15 days or more to qualify for duty abatement.