2011 (6) TMI 519 - AT - Central Excise

Claim of abatement of Central Excise duty - denied by the lower authority on the ground that they had not filed declaration as provided under Rule 96ZO (2) (e) of the Central Excise Rules, 1944 Held that - In the case of Maharshi Commerce Ltd. (2003 - TMI - 109224 - CEGAT, BANGALORE - Central Excise) non-filing of declaration is only a procedural lapse. matter remanded to the adjudicating authority to quantify the amount of abatement entitled to the appellants. appeal is allowed by way of remand.

Summary

Issues:
Claim of abatement of Central Excise duty during closure of unit denied due to non-filing of declaration as per Rule 96ZO (2) (e) of Central Excise Rules, 1944.

Analysis:
1. The appellants, engaged in manufacturing Mild Steel Ingots, operate under the compounded levy scheme and are required to file a declaration about the closure of their unit to claim abatement from duty as per Rule 96ZO. The appellants informed the department of the unit closure, paid duty for the inactive period, and subsequently claimed abatement. However, the abatement claim was initially denied by the lower authority for not filing the required declaration under Rule 96ZO (2) (e).

2. The appellants appealed to the Tribunal, which remanded the matter back to the adjudicating authority for fresh consideration. During the remand proceedings, the abatement claim was again rejected on the grounds of non-declaration of the factory closure period as mandated by Clause (e) of Rule 96ZO (2). This denial led to the current appeal before the Tribunal.

3. In the absence of representation from the appellants, the Tribunal proceeded to consider the case based on available records. The Revenue, represented by Shri V.K. Singh, argued that the appellants failed to comply with the requirement of filing a declaration specifying the closure period, along with other details such as stock and electronic meter readings, as per Rule 96ZO (2) (e).

4. Upon reviewing the submissions, the Tribunal noted that while the appellants fulfilled most conditions of Rule 96ZO (2), they failed to specify the exact period of factory closure as required by Clause (e). Citing precedents like Maharshi Commerce Ltd. v. CCE Hyderabad, the Tribunal emphasized that the day of closure and reopening should be excluded in calculating the closure period, starting from '00.00' hrs. The Tribunal also highlighted that non-filing of declaration is a procedural lapse, as established in previous judgments.

5. In light of the above analysis and legal principles, the Tribunal allowed the appeal by way of remand. The matter was sent back to the adjudicating authority to determine the amount of abatement due to the appellants in accordance with the decisions referenced in the judgment.