2015 (10) TMI 422 - AT - Central Excise

Denial of abatement claim - production capacity based duty - whether appellant is entitled for abatement as provided under Section 3A of the Central Excise Act, 1944 - Held that - Appellant indeed, have been intimating to the department from time to time vide various correspondence regarding the closure and restarting of the production in their factory. Ld. Commissioner s finding for rejecting the claim of abatement is boiled down on only one aspect that is during intimating closure of the production and restoring of the production the appellant has not intimated hours. In our view if hours of particular date was not declared by the appellant but if date is intimated it can be taken as from 0000 hours of that particular date. Therefore in our considered view merely because hour of date of closure of production and restoration of production in the communication is not mentioned the same can not be the reason for denying the abatement. - as intimations given by the appellant from time to time to the department, correspondence of the electricity department and the facts narrated in Hon ble Bombay High Court at Goa bench there is no dispute that production of the appellant factory remained closed during the period declared by them to the department and this fact also not disputed by the Ld. Commissioner. - appellant is legally entitled for abatement and accordingly the demand is not sustainable. We therefore set aside the impugned order - Decided in favour of assessee.

Summary

Issues:
1. Appeal against Order-in-Original confirming demand of Central Excise duty.
2. Rejection of abatement claim by the Ld. Commissioner.

Analysis:
1. The appeal was against the Order-in-Original confirming a demand of Rs. 54,04,368 under Rule 96ZO(3) of the Central Excise Rules, 1944. The appellant, engaged in manufacturing mild steel ingots, had filed a declaration to pay duty based on Annual Capacity of production. Despite not paying the full duty from October 1997 to March 2000, the Commissioner issued show cause notices leading to the current appeal. After remand by CESTAT, the Commissioner reconfirmed the demand, penalty, and interest. The appellant argued that the abatement claim was wrongly rejected due to procedural lapses, citing various intimations to the department about factory closures and restarts supported by evidence like electricity bills and High Court judgments. The Ld. Counsel contended that failure to specify exact hours of closure should not negate the abatement claim, relying on relevant tribunal judgments.

2. The key issue was whether the appellant was entitled to abatement under Section 3A of the Central Excise Act, 1944. The Ld. Commissioner rejected the claim based on the appellant's failure to specify continuous closure hours despite regular intimation of closure periods. However, a detailed review of the documents revealed consistent notifications to the department about factory closures and restarts with specific dates and some instances of hours mentioned. The correspondence, including electricity department records and a High Court judgment, supported the appellant's claim of factory closures during the specified periods. The Ld. Commissioner's sole basis for denial, i.e., lack of exact hours in closure notifications, was deemed insufficient to reject the abatement claim. Citing precedents and the factual evidence, the Tribunal concluded that the appellant was entitled to abatement, rendering the demand unsustainable. The impugned order was set aside, and the appeal was allowed with consequential relief, if any, as per the law.