2009 (12) TMI 773 - AT - Central Excise

Summary

Issues:
1. Dispute regarding duty payable for the period from September 1999 to July 2000, involving the dismantling of a cold rolling machine and factory closure.
2. Appeal by M/s. National Ceramics (NC) for benefit of dismantling one machine and factory closure relaxation.
3. Appeal by Revenue against Commissioner's decision on factory closure benefits for April and May 2000.
4. Interpretation of Rule 96ZGG and Rule 96ZP(2) of Central Excise Rules, 1944.
5. Application of Rule 962G for condoning failure to comply with special procedure.

Analysis:
1. The dispute from September to November 1999 involved the dismantling of a cold rolling machine by NC. The Commissioner (Appeals) directed the Original Adjudicating Authority to consider NC's intimation about the dismantling. The Revenue challenged this, leading to multiple rounds of litigation. The Original Adjudicating Authority failed to address NC's letter dated 22-9-1999, which clearly stated the dismantling of a machine. As the letter was acknowledged by the department, NC was eligible for duty abatement on three machines instead of four for October and November 1999. The benefit was granted due to the acknowledgment of NC's letter.

2. For the period of April to July 2000, NC claimed factory closure due to financial difficulties, supported by a Chartered Accountant's certificate showing no production. The Commissioner (Appeals) granted benefits for April and May 2000 but omitted June and July. The Rule 96ZGG was incorrectly applied, and Rule 96ZP(2) was relevant for factory closure benefits. The power under Rule 962G was exercised to grant NC relief for the entire period, considering the lack of production and supporting documentation. This decision avoided further litigation and was deemed appropriate.

3. The penalty under Section 173Q(a) was not imposed due to the circumstances and findings of the case. The appeal by Revenue was rejected, and NC's appeal was allowed, with cross-objections also addressed. The judgment highlighted the importance of accurate application of rules and powers by the adjudicating authorities to prevent prolonged litigation and ensure fair treatment for the parties involved.