2009 (3) TMI 783 - AT - Central Excise

Production capacity based duty - Abatement - Closure of factory - rejection on the ground that since closure was for a period of less than one month, the assessee ought to have paid duty liability and then sought abatement, in terms of Rule 96ZO of the CER, 1944 - Held that - the Tribunal has held in the case of Varun Silk Mills P. Ltd. v. CCE, Surat, 2007 (4) TMI 436 - CESTAT, AHMEDABAD that abatement benefit is a substantial benefit which cannot be denied only on the ground that the assessee did not pay duty first and then claim abatement - In the absence of any such condition in Rule 96ZO, which is relevant rule in the present case, the benefit of abatement should have been extended - appeal allowed - decided in favor of appellant.

Summary

The Appellate Tribunal CESTAT, Chennai ruled in favor of the appellant, rejecting the Commissioner's decision to deny abatement on the ground of factory closure for less than a month. The Tribunal found no stipulation in Rule 96ZO requiring duty payment before claiming abatement, citing a previous case where abatement benefit could not be denied for not paying duty first. The Tribunal set aside the Commissioner's order and allowed the appeal.