2016 (2) TMI 636 - AT - Central Excise

Abatement claim rejected - procedure lapses on which the abatement was rejected are as the appellant failed to declare closing balance of stock, intimation for resumption of production was filed belatedly on 17-01-2000 whereas the production was resumed on 15-01-2000 and failure to declaration continuous closer period - Held that - All the above lapse are the minor procedure lapse, on that basis abatement could not have been rejected. As regard the lapse of non-declaring the closing stock, we agree with the appellant that the closing stock is otherwise recorded and available in the stock account i.e. RG-1 register. It is also declared in monthly returns and both these records are statutory records. Therefore though the appellant did not declare the closing stock specifically, the same stands complied with as the same was declared in the RG-1 and monthly returns. Appellant s production was resumed on 15-1-2000, however the intimation was filed on 17-1-2000, it is observed that 15th and 16th being Saturday and Sunday were holidays. Therefore, filing of intimation on 17-1-2000 cannot be treated as belated in terms of provision of General Clauses Act, accordingly to which any act to be done on a particular date and if any holiday falls on that date, the next working day shall be treated as date within the period prescribed. Therefore, there is no delay on the part of the appellant in filing the intimation on 17-01-2000. Regarding non-declaration of continuous closing period, it is a minor lapse, as from the intimation date of the closure and date of resumption of production, the period of closure can be easily ascertained. Therefore, it cannot be said, the period of closure is not in the knowledge of the department.- Decided in favour of assessee

Summary

Issues:
- Rejection of abatement claim under Section 3A(3) of Central Excise Act, 1944 read with Rule 96ZP(2) of Central Excise Rules.
- Failure to declare closing balance of stock.
- Belated filing of intimation for resumption of production.
- Non-declaration of continuous closure period.

Analysis:

The appeal challenged the Order-in-Original rejecting the abatement claim for a specific period. The appellant, engaged in manufacturing non-alloy ingots, had their production suspended and later resumed, filing an abatement claim which was rejected due to procedural lapses. The primary grounds for rejection were the failure to declare closing stock, belated filing of production resumption intimation, and non-declaration of the continuous closure period.

The appellant argued that despite minor infractions, they substantially followed the abatement claim process. They maintained daily stock accounts in statutory records and contended that the closing stock was recorded in the RG-1 register and monthly returns, fulfilling the requirement. Regarding the delayed intimation of production resumption, they explained that the delay was due to holidays, which was permissible under the General Clauses Act. They also highlighted that the closure period could be easily ascertained from the provided intimations.

Upon careful consideration, the Tribunal found the procedural lapses to be minor and not substantial enough to warrant the abatement rejection. The Tribunal agreed with the appellant that the closing stock was effectively declared through statutory records, and the delay in intimation was justified due to holidays. Additionally, the period of closure was ascertainable from the information provided. Citing various judgments, the Tribunal emphasized that minor procedural lapses should not lead to abatement denial.

Consequently, the Tribunal concluded that the appellant had substantially complied with the abatement procedure and was entitled to the claimed abatement. The impugned order was set aside, and the appeal was allowed in favor of the appellant.