2011 (8) TMI 381 - AT - Central Excise

Exemption - Notified vide Notification No. 36/98-CE dated 10.12.1998 - Rule 96ZQ(7)(f) - when the assessee become aware that the notification has come into operation, they have approached the Central Excise authorities on 10.03.2000 and on 11.03.2000 itself and they had dismantled Primatex stenter which was lying closed in their premises - It is also seen from the records and various documents that Primatex stenter was never in operation after 07.12.1999, which was dismantled on 11.3.2000 - Therefore, even though from 01.3.2000 the liability was thrust on such processors who were having stenter installed in their processing premises the duty on compound levy stands attracted on such stenter - There is no doubt that Primatex stenter had in terms of M/s. Laxmi Mangal Textile letter had not run prior to 10.3.2000 rather was closed from 07.12.1999 itself, then the duty leviable is not attracted to that stenter in their case for the period of 01.3.2000 to 10.3.2000 - Decided in favour of assessee.

Summary

Issues:
1. Abatement claim denial under Rule 96ZQ(7)(a) for incomplete factory closure.
2. Non-payment of applicable duty for a period less than one month under Rule 96ZQ(7)(f).

Analysis:

Issue 1: Abatement Claim Denial under Rule 96ZQ(7)(a)
The appeal pertains to the denial of abatement claim by the Revenue based on Rule 96ZQ(7)(a) which specifies that abatement is applicable only on complete closure of the factory, not on closure of a hot-air stenter. The Revenue contended that the factory was operational with another stenter installed, hence the abatement claim was rightly denied. However, the defence of the assessee was that they had clearly informed about the closure of one stenter and the installation of another. The Tribunal noted that the relevant Rule emphasizes complete closure of the factory for abatement, and in this case, the stenter in question had not been operational since December 1999. The Tribunal upheld the Commissioner (Appeals) decision in favor of the assessee, stating that the duty liability was not attracted for the period in question.

Issue 2: Non-payment of Applicable Duty for Less Than One Month under Rule 96ZQ(7)(f)
The second ground of appeal by the Revenue was based on Rule 96ZQ(7)(f) which requires the processor to pay duty for the entire month if the abatement claim is for a period less than one month. However, this ground was not considered due to the findings related to the first issue. Since the Tribunal found in favor of the assessee regarding the abatement claim denial, the second ground did not come into play for consideration.

In conclusion, the Tribunal found the contentions of the Revenue unsustainable and upheld the order in appeal, providing consequential relief to the assessee. The appeal filed by the Revenue was rejected, affirming the decision in favor of the assessee.