2017 (11) TMI 1504 - AT - Central Excise

Abatement claim - Rule 96ZO of the Central Excise Rules, 1944 - reason for rejection of abatement is that appellant did not pay the duty in advance as provided in proviso 96ZO - Held that - the abatement should be granted without asking him to pay duty first or where he had paid the duty, he should be reimbursed of the amount of duty paid, in terms of the order of abatement issued by the Commissioner. The impugned order is modified to the extent of allowing the abatement for Sl.No.1 and 3 show in the Table for the period 14.04.1999 to 28.04.1999 and 22.10.1999 to 29.10.1999 for an amount of ₹ 4,72,222.30 and ₹ 2,28,494.70 respectively. The remaining part of the impugned order is not disturbed/interfered. Appeal allowed in part.

Summary

Issues:
Claim of abatement of duty based on periods of closure under Compounded Levy Scheme.

Analysis:
1. The appellant, engaged in manufacturing steel products, claimed abatement of duty during periods of factory closure under the Compounded Levy Scheme. The Commissioner rejected certain claims citing non-payment of duty liability in advance as required by Rule 96ZO of the Central Excise Rules, 1944.

2. The appellant appealed, conceding one claim and contesting the reduction of eligible amounts for two other periods of closure. The appellant relied on a High Court judgment in their favor, referencing a Board Circular supporting abatement without prior duty payment under specific conditions.

3. The Authorized Representative reiterated the Commissioner's findings, emphasizing the duty prepayment requirement under Rule 96ZO.

4. The Tribunal considered the appellant's submissions and the relevant law under Rule 96ZO, which mandates advance duty payment for furnaces exceeding 3 MTS or in case of capacity changes.

5. The Tribunal noted the appellant's concession of one claim and non-dispute of the reduced eligible amounts determined by the Commissioner for the other periods of closure.

6. Referring to the High Court judgment and the supportive Board Circular, the Tribunal found the rejection of abatement unjustified and modified the impugned order. Abatement was allowed for the contested periods, with the appeal partly allowed in favor of the appellant.

7. The Tribunal's decision highlighted the specific periods for which abatement was granted, maintaining the rest of the impugned order undisturbed. The judgment provided consequential relief as applicable.

This detailed analysis outlines the appellant's claim for abatement of duty during factory closure periods, the Commissioner's rejection based on non-payment of duty in advance, the appellant's arguments, and the Tribunal's decision favoring the appellant based on legal provisions and precedents.