2015 (5) TMI 60 - HC - Central Excise

Abatement under sub-section (3) of Section 3A of the Central Excise Act, 1944 - Closure of factory - Held that - As per sub-clause (a) of the Rule 96ZO (2), manufacturer has to inform, in writing, about the closer of factory to the Assistant Commissioner, Central Excise with a copy to the Superintendent, Central Excise, either prior to the date of closer or on the date of closer. - There is no material available on the record that intimation for closer of the factory was sent and got received in the office of Assistant Commissioner, Central Excise and in the office of Superintendent of Central Excise either on 01.09.1997 or prior to 01.09.1997. - Undisputedly, fax was sent and received in the office of Assistant Commissioner, Central Excise on 02.09.1997, however, factory, according to the petitioner, was closed with effect from 01.09.1997, it means that intimation about the closer of the unit was sent and received after the closer of the unit. Therefore, petitioner has not made compliance of clause (a) of Rule 96ZO (2). - This is the settled position of law to take benefit of concession/abatement, manufacturer is duty bound to follow the strict procedure given under the Act or Rules which admittedly petitioner has not done - Decided against assessee.

Summary

Issues:
1. Assailing judgment passed by Customs, Excise and Gold (Control) Appellate Tribunal.
2. Claim for abatement under sub-section (3) of Section 3A of the Central Excise Act, 1944.
3. Compliance with Rule 96ZO (2) of the Central Excise Rules.
4. Intimation requirements for factory closure and restart.
5. Correctness of information provided regarding stock availability.

Analysis:

1. The petitioner challenged the judgment of the Customs, Excise and Gold (Control) Appellate Tribunal, seeking abatement under sub-section (3) of Section 3A of the Central Excise Act, 1944. The petitioner contended that the factory closure was duly notified to the Assistant Commissioner, Central Excise, as required by Rule 96ZO (2) of the Central Excise Rules.

2. The petitioner argued that the factory remained closed from 01.09.1997 to 08.09.1997, with proper intimation provided to the authorities. The petitioner emphasized compliance with the procedural requirements for claiming abatement under the Act. However, the court noted discrepancies in the information provided and the actual stock availability during the closure period.

3. Rule 96ZO (2) mandates that the manufacturer must inform the Assistant Commissioner of Central Excise about the closure of the factory either before or on the date of closure. The court observed that there was no evidence to prove that the intimation for factory closure was received by the authorities on or before 01.09.1997, as required by the rule.

4. Additionally, the petitioner failed to adhere to the requirement of immediately informing the authorities about the closure of production, as per clause (b) of Rule 96ZO (2). The court highlighted that the necessary intimation was sent on 08.09.1997 when production resumed, rather than immediately after the factory closure on 01.09.1997.

5. The court also raised concerns regarding the accuracy of information provided by the petitioner regarding the stock availability during the closure period. Discrepancies were noted between the reported stock figures and the actual findings during the inspection conducted on 02.09.1997, indicating a lack of transparency in the information provided.

In conclusion, the court upheld the Tribunal's decision, emphasizing the importance of strict adherence to procedural requirements for claiming concessions or abatements under the Central Excise Act. The petitioner's failure to comply with the prescribed rules and discrepancies in the information provided led to the dismissal of the petition seeking abatement.