2010 (12) TMI 319 - AT - Central Excise

Abatement claim - denial of abatement claim on the ground of closure of period being less than 15 days - appellant acquired the right under Compounded Levy Scheme, to claim abatement of duty, in respect of their one stenter, which remained closed continuously for the period of more than 15 days, withdrawal of Compounded Levy Scheme cannot affect their right - case of Kisan Sahkari Chini Mills Ltd. Vs. CCE Kanpur - (2001 - TMI - 48888) followed - the abatement claimed allowed.

Summary

Issues:
1. Abatement claim under Compounded Levy Scheme for the period 16.2.01 to 28.2.01.

Analysis:
The appellant, an independent textile processor, was working under the Compounded Levy Scheme for man-made fabrics. The dispute arose regarding the abatement claim of Rs.3,71,428 for the period from 16.2.01 to 28.2.01. The abatement was denied due to the withdrawal of the scheme on 28.2.01, making the final product liable to duty on an ad valorem basis from 1.3.01. The denial was based on the argument that the period for granting abatement fell short by 3 days as per the erstwhile Rule 96ZQ(7).

The appellant contended that the rules were omitted before the completion of 15 days, and therefore, the proportionate abatement claim should be sanctioned despite the scheme's withdrawal not being within their control. They argued that their right to claim abatement, earned due to circumstances beyond their control, should not be defeated by the scheme's subsequent withdrawal.

The Tribunal referred to a similar case, Shivalik Prints Vs. CCE Faridabad, where the denial of abatement claim for a similar period was set aside. The Tribunal held that under Section 38A of the Act, the withdrawal of the scheme should not affect any right acquired under it. Relying on the judgment in Kisan Sahkari Chini Mills Ltd. Vs. CCE Kanpur, the Tribunal allowed the abatement claim as the appellant had acquired the right under the Compounded Levy Scheme for their closed stenter.

Considering the precedent and the appellant's circumstances, the Tribunal set aside the impugned order and allowed the appeal, granting consequential relief to the appellant. The decision was based on the application of the previous judgment's ratio to the present case, ensuring the appellant's right to claim abatement was upheld despite the scheme's withdrawal.