2000 (7) TMI 991 - AT - Central Excise

Summary

Issues:
Claim for abatement of duty under Rule 96ZO based on factory closure periods in 1997.

Analysis:
The appellants, manufacturers of MS Ingots and Billets, were paying duty based on production capacity as determined by the Commissioner. The dispute centered on the appellants' claim for abatement of duty under Rule 96ZO due to their factory closure in September, October, and November 1997. The Commissioner rejected their claim, stating that abatement is allowable only when the factory is completely closed with no activity. He emphasized strict compliance with all conditions for abatement, including timely intimation of closure and furnishing stock position details.

The appellants argued that the Commissioner's interpretation of Rule 96ZO was erroneous. They contended that the rule requires no production of ingots and billets, not a complete halt in all factory transactions. Additionally, they asserted that the intimation requirement only mandates filing before or on the day of closure, which they had complied with. The appellants also cited a Public Notice clarifying that clearance from existing stock during closure does not disqualify a factory from abatement eligibility.

Upon review, the Tribunal disagreed with the Commissioner's interpretation. They found that the rule indeed focuses on non-production of notified goods, not a total factory shutdown. Referring to the Public Notice, the Tribunal confirmed that clearance from existing stock during a closure period does not affect abatement eligibility. Regarding the intimation requirement, the Tribunal ruled that delay in filing should not bar abatement, especially if the intimation is submitted on the day of closure. Therefore, the Tribunal held that the appellants were eligible for abatement from the date of intimation and remanded the case to the Commissioner for reconsideration, instructing a fair hearing for the appellants before a final decision is made.