2017 (7) TMI 89 - AT - Central Excise

Abatement - closure of factory - whether for allowing the abatement under Rule 10 of Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010, the closure of the factory should be in a particular month or if 15 days spill over to the next month, the abatement is available to the assessee or not? - Held that - Rule 10 of the Rules, 2010 states that it provides the abatement if the production is closed for continuous period of 15 days. In the present case, the factory was closed from 21.01.2011 to 04.02.2011 i.e. for 15 days. In Rule 10, there is no mention that the 15 days closure should be in a particular month. In the absence of such a mention, the revenue cannot import any extraneous words in the rule and interpret that the closure should be in a particular month. The only requirement is the closure should be for a continuous period of 15 days, whether it spills over in the next month or in a particular month. Appeal dismissed - decided against Revenue.

Summary

Issues:
- Interpretation of Rule 10 of Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 regarding abatement for closure of factory for 15 days spanning across two months.

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI concerned the interpretation of Rule 10 of the Rules, 2010 regarding the abatement for closure of a factory for 15 days, specifically addressing whether the closure spanning across two months would still qualify for abatement. The Revenue contended that the closure of 15 days should be within a particular month to be eligible for abatement, as the duty under the Rules is payable on a monthly basis. On the other hand, the respondent argued that Rule 10 does not specify the closure to be within a particular month, emphasizing the requirement of a continuous period of 15 days for abatement. The respondent cited several judgments by the Tribunal supporting their stance.

The Tribunal carefully considered both arguments and examined Rule 10 of the Rules, 2010, which provides for abatement if production is closed for a continuous period of 15 days. The Tribunal noted that the rule does not stipulate the closure to be within a specific month. Therefore, the Tribunal held that the closure of the factory for 15 days, even if spanning across two months, fulfills the condition of a continuous period of 15 days as required by Rule 10. The Tribunal emphasized that the revenue cannot introduce additional conditions beyond what the rule explicitly states. Additionally, the Tribunal referenced previous judgments that had already settled the issue at hand, indicating that the matter was no longer open for debate. Consequently, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the appeal filed by the Revenue.

In conclusion, the Tribunal's judgment clarified that the abatement for closure of production for 15 days under Rule 10 of the Rules, 2010 is not restricted to a specific month, and a continuous period of 15 days, regardless of spanning across two months, satisfies the conditions for abatement. The ruling reaffirmed the importance of interpreting rules based on their explicit provisions and established precedents, ultimately upholding the respondent's entitlement to abatement in the case at hand.