2005 (8) TMI 485 - AT - Central Excise

Summary

Issues:
Abatement claim rejection under Rule 96ZQ(7) of Central Excise Rules due to stenter closure duration.

Detailed Analysis:

The appellant, engaged in manufacturing man-made fabric under the Compounded Levy Scheme, appealed against the rejection of their abatement claim under Rule 96ZQ(7) of Central Excise Rules. The rejection was based on the stenter closure duration being only four days, whereas the rule required closure for more than seven days. The appellant's stenter was closed from 26th Feb. 2000 to 31-3-2000, during which duty was paid as determined by the Commissioner of Central Excise. The abatement claim was availed, but rejected post the law change on 1-3-2000, limiting abatement to complete factory closure only. The appellant argued that despite the law change, their stenter was closed for more than seven days, and relied on a Tribunal decision to support their claim that the closure duration should be considered for more than seven days, not restricted to the law change date.

The Revenue contended that under Rule 96ZQ, manufacturers under the Compounded Levy Scheme could claim abatement if the stenter remained closed for more than seven days, applicable until 29-2-2000. Since the stenter was closed for only four days before this date, the abatement claim denial was justified. However, it was acknowledged by the Revenue that the stenter was closed for more than seven days from 26-2-2000 to 31-3-2000. The appellant sought abatement for the period of closure, emphasizing that despite the law change, the closure duration entitled them to abatement before 1-3-2000.

The Tribunal considered the factual position where the stenter was closed for more than seven days and the change in law limited the abatement claim up to 29-2-2000. Referring to a previous decision, the Tribunal held that manufacturers could claim abatement for closures exceeding seven days, not restricting claims for shorter durations. As the stenter was closed for more than seven days and the law change affected the claim only from 1-3-2000, the appellant was entitled to abatement for the period before the law change. Consequently, the impugned order was set aside, and the appeal was allowed, granting the appellant the abatement for the relevant period before 1-3-2000.