2009 (1) TMI 725 - AT - Central Excise

Summary

Issues:
1. Interpretation of rules regarding abatement under the Compounded Levy Scheme for independent textile processors.
2. Determination of duty liability on stenter machines during closure periods.
3. Re-fixation of capacity and duty payable after removal of a chamber from the machine.

Analysis:
1. The case involved the appellants covered under the Compounded Levy Scheme for independent textile processors. The issue was whether abatement under Rule 96ZQ(7) applied to the closure of a hot air stenter machine or only to complete factory closure. The Tribunal clarified that abatement was not applicable to the present case as the appellants sought permission to remove one chamber from a stenter machine, not complete factory closure. The Tribunal emphasized that the Commissioner's order was based on a presumption of abatement, which was incorrect. The matter was remanded to the Original Adjudicating Authority to re-fix the capacity and determine duty liability accordingly.

2. The next issue revolved around the duty liability on stenter machines during closure periods. The appellants had stopped one machine for 2 days to remove a chamber, leading to a demand for differential duty. The Tribunal noted that the Commissioner's order did not address the re-fixation of capacity after chamber removal, resulting in an improper calculation of duty liability. The Tribunal directed the Original Adjudicating Authority to re-fix the capacity and assess the duty payable from the effective date, considering the closure period.

3. Lastly, the case involved the re-fixation of capacity and duty payable after the removal of a chamber from the stenter machine. The appellants argued that the Commissioner failed to re-fix the capacity and specify the operational date after chamber removal, leading to an incorrect duty calculation. The Tribunal agreed with the appellants and remanded the matter for proper re-fixation of capacity by the competent authority, along with determining the duty liability from the appropriate date. The Tribunal set aside the Commissioner's order and instructed a re-examination by the Original Adjudicating Authority.

In conclusion, the judgment clarified the misapplication of abatement rules, highlighted the necessity of re-fixing capacity after chamber removal, and emphasized the accurate determination of duty liability during closure periods. The case underscored the importance of following proper procedures and rules in calculating duty obligations for textile processors under the Compounded Levy Scheme.