2004 (12) TMI 545 - AT - Central Excise

Summary

Issues:
Claim for abatement of duty due to factory closure and rejection by the Commissioner.

Analysis:
The appellant, a manufacturer of ingots of non-alloy steel, faced a factory closure due to a hydraulic pump failure, resulting in the cessation of production. The abatement claim for Central Excise duty was rejected by the Commissioner under Rule 96ZO(2)(a) of the Central Excise Rules, 1944, citing lack of intimation about the closure to the authorities. The appellant argued that the closure was unplanned, and they promptly informed the Divisional Office and Superintendent after the closure. The appellant relied on a previous tribunal decision where delays in intimation due to uncontrollable circumstances were condoned. The Tribunal found that the appellant had sent the intimation promptly after the closure, considering the circumstances, and held the abatement of duty during the factory closure as admissible. Consequently, the appeal was allowed, granting relief to the appellant.

This judgment highlights the importance of timely intimation to authorities in cases of factory closure for claiming abatement of duty under Central Excise rules. It emphasizes that delays in intimation beyond the control of the appellant, such as unexpected machinery failures, should not hinder the admissibility of duty abatement. The decision underscores the need for a practical approach in assessing such situations, ensuring that genuine cases of closure are not penalized due to technicalities. The ruling provides clarity on the admissibility of duty abatement during unforeseen closures, safeguarding manufacturers facing sudden operational disruptions from undue financial burdens.