2015 (8) TMI 35 - AT - Central Excise

Denial of abatement claim - whether appellant is required to pay duty for whole of the period or required to pay duty on pro rata basis after availing the abatement for closure period and consequently is entitled to claim the abatement of excess duty paid or not - Held that - The denial of abatement is only on the ground that appellant is required to pay duty for whole of the month and thereafter to claim the abatement but that is not correct view in the light of the decision of this Tribunal in the case of Shree Flavours Pvt. Ltd. (2014 (4) TMI 417 - CESTAT NEW DELHI). Therefore, I hold that appellant is entitled for abatement of duty as claim.

Summary

Issues:
- Abatement claim rejection based on duty payment timeline
- Entitlement for abatement of excess duty paid
- Interpretation of duty payment rules and abatement eligibility

Analysis:
1. The appellant filed an appeal against the rejection of their abatement claim due to duty payment issues. The appellant, a manufacturer of Pan Masala, claimed abatement as their factory remained closed for over 15 days, seeking refund for excess duty paid for June 2012.

2. The Counsel argued that the duty payment was made for four days, although the factory operated for only three days in June. The rejection was based on the duty payment deadline, contending that duty should have been paid by 05.06.2012. The Ld. Commissioner's observations were disputed citing precedents like Shree Flavours Pvt. Ltd. and Kays Fragrance Pvt. Ltd.

3. The core issue was whether duty should be paid for the whole month or on a pro rata basis after considering abatement for closure periods. Referring to the Kays Fragrance Pvt. Ltd. case, it was established that duty need not be paid for the entire month before claiming abatement, and interest could suffice for delayed payment.

4. The Tribunal's decision in Shree Flavours Pvt. Ltd. case emphasized that if a unit closes before depositing duty for the entire month, they can seek abatement at that point, paying duty only for operational days. Failure to follow this procedure may lead to interest charges but not denial of abatement benefits.

5. The judgment concluded that the denial of abatement based on the duty payment timeline was incorrect. Citing the precedent in Shree Flavours Pvt. Ltd. case, the appellant was deemed entitled to abatement of duty as claimed. Consequently, the impugned order was set aside, and the appeal was allowed with any necessary relief.