2015 (12) TMI 1488 - AT - Central Excise

Denial of Abatement claim - manufacture of branded unmanufactured tobacco - period of closure of factory - Whether the Phrase Continuous period of 15 days or more stipulated in Rule 10 of the said Rules would mean period of 15 days of a particular month or the same can be spilled over to the next calendar month, for computation of the period of 15 days - Held that - factory of the appellant was closed during the period from 23.03.2013 to 26.09.2013. Though the factory was continuously closed for a period of about 6 months, the Department is of the view that since in the month of March 2013, the factory was closed only for 9 days, the benefit of abatement as provided in Rule 10 shall not be applicable. In this context, I find that the case of the appellant is supported by the decision of the Tribunal in the case of Kaipan Pan Masala (2013 (1) TMI 356 - CESTAT, NEW DELHI), holding that for computation of the period of 15 days, the remaining period in the next calendar month, during which the factory was closed, shall also be taken into consideration - appellant shall be eligible for abatement for the period from 23.03.2013 to 31.03.2013, which have been rightly allowed by the Original Authority. In view of above, the impugned order denying the abatement to the appellant is set aside - Decided in favour of assessee.

Summary

Issues:
1. Interpretation of the phrase "continuous period of 15 days" in Rule 10 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines Rules, 2010.
2. Application of abatement for excise duty based on factory closure duration.
3. Adjudication of abatement claim by the Commissioner (Appeals).

Analysis:
1. The case involved determining the meaning of the term "continuous period of 15 days" as per Rule 10 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines Rules, 2010. The appellant contended that the factory closure from 23.03.2013 to 26.09.2013 should qualify for abatement, while the Revenue argued that since the closure in March 2013 was only for 9 days, abatement should not apply. The Tribunal referred to a previous decision and held that the period of closure can extend to the next month for calculating the 15-day period. This interpretation favored the appellant, allowing the abatement claim for the specified period.

2. The appellant sought abatement of excise duty based on the factory closure duration as per Rule 10. The Deputy Commissioner initially allowed the abatement, but the Commissioner (Appeals) overturned this decision, stating that the factory was not closed continuously for 15 days in March 2013. The appellant argued that the closure from 23.03.2013 to 26.09.2013 should be considered. The Tribunal agreed with the appellant's interpretation, emphasizing that the continuous closure period can span across months, leading to the allowance of the abatement claim.

3. The Commissioner (Appeals) had denied the abatement claim, leading to the Revenue's appeal before the Tribunal. The Tribunal, after thorough analysis and considering legal precedents, concluded that the appellant was eligible for abatement for the period in question. The Tribunal set aside the impugned order and allowed the appeal in favor of the appellant, highlighting the correct application of the law regarding the computation of the 15-day continuous closure period for abatement eligibility.

This detailed analysis of the judgment showcases the legal intricacies involved in interpreting statutory rules and applying them to specific factual scenarios, ultimately resulting in a favorable outcome for the appellant in this case.