2011 (3) TMI 1204 - AT - Central Excise

Abatement sought by the unit under Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 denied - unit was not closed continuously for a period of 15 days or more in the month of November, 2008 - Held that - A reading of the rule makes it very clear that if a unit is closed continuously for a period of 15 days or more the benefit of abatement will be available - Nowhere does the rule specifically stipulate that the closure should take place within a calendar month itself - there is no dispute that the unit was closed continuously for a period of 15 days even though the closure overlapped in October-November and again in November-December - Decided in favor of the assessee

Summary

Issues: Appeal against Order-in-Appeal No: AKP/136/NSK/09 dated 31/12/2009 regarding abatement under Rule 10 of Pan Masala Packing Machines Rules, 2008.

Analysis:
1. Facts of the Case: The appellant, a Gutkha manufacturer, operated under the compounded levy scheme. The unit was closed for specific periods in 2008, leading to a dispute regarding abatement eligibility.

2. Jurisdictional Assistant Commissioner's Decision: The Assistant Commissioner rejected the abatement claim, stating that the unit did not close continuously for 15 days in November 2008, as required by Rule 10 of the Pan Masala Packing Machines Rules, 2008.

3. Commissioner (Appeals) Decision: The Commissioner held that Rule 10 did not mandate continuous closure within a calendar month. Any closure for 15 days or more, regardless of timing, entitled the assessee to abatement. The appeal was allowed in favor of the assessee.

4. Department's Appeal: The department challenged the Commissioner's decision, arguing that the closure did not meet the 15-day continuous requirement as per Rule 10.

5. Tribunal's Analysis: Rule 10 specifies abatement if a factory does not produce goods for 15 consecutive days. The Tribunal noted that the closure, though spanning across months, met the 15-day criterion. As per the rule, the unit qualified for abatement during the closure period.

6. Final Decision: The Tribunal upheld the Commissioner's decision, finding no flaw in granting abatement to the assessee. The department's appeal was dismissed based on the rule's clear provision and the factual closure duration.

This judgment clarifies the interpretation of Rule 10 regarding abatement eligibility for non-production periods, emphasizing the 15-day continuous closure criterion over specific calendar month requirements. The decision highlights the importance of adhering to statutory provisions in excise matters and ensuring accurate application of rules to determine entitlements like abatement.