2019 (11) TMI 830 - AT - Central Excise

Abatement of duty - closure of factory - Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 - the appellant claimed abatement for the month of April 2015 inasmuch as the duty was deposited for the said period. However, for the next month i.e. May 2015 he did not deposit the duty for the period of closure till 15.05.2015 and claimed abatement himself. HELD THAT - There is no dispute about the fact that the factory was continuously closed from 18.04.2015 to 15.05.2015. In such a scenarios, the assessee was entitled to the abatement of duty for the month of April 2015 as also May 2015 depending upon the closure period. The artificial bifurcation done by the Commissioner (Appeals) for April 2015 and May 2015 separately thus holding the period of closure in April was only 13 days, cannot be appreciated. No doubt, for May 2015 appellant was required to pay duty and then claim abatement but the said procedural lapse on the part of the assessee cannot lead to the denial of benefit otherwise available to the assessee. The assessee was entitled to the abatement for both the months for the closure period, with directions to the original authority to quantify the interest liable to the assessee - appeal disposed off.

Summary

Issues:
1. Interpretation of duty liability under Chewing Tobacco and Unmanufactured Tobacco Packing Machines Rules, 2010.
2. Claim of abatement for factory closure period.
3. Procedural requirements for claiming abatement.
4. Dispute over the closure period and entitlement to abatement.
5. Appeal against the order of the Asst. Commissioner by the Revenue.
6. Artificial bifurcation of closure period by the Commissioner (Appeals).
7. Liability to pay interest for procedural lapses.

Analysis:
The judgment revolves around the interpretation of duty liability under the Chewing Tobacco and Unmanufactured Tobacco Packing Machines Rules, 2010. The appellant, engaged in tobacco product manufacturing, claimed abatement for a factory closure period from 18.04.2015 to 15.05.2015. The rules required duty deposit by the 5th of the succeeding month, with provision for abatement if the factory is closed continuously for 15 days or more. The Asst. Commissioner granted abatement for April 2015, but the Commissioner (Appeals) overturned this decision, citing only a 13-day closure in April and procedural lapses in May. The Commissioner's decision was appealed by the appellant.

The appellate tribunal found that the factory was indeed closed continuously for 28 days, entitling the appellant to abatement for both April and May 2015. The tribunal criticized the artificial bifurcation of closure periods by the Commissioner (Appeals) and emphasized that the procedural lapse in duty deposit for May should not deny the appellant the abatement benefit. The tribunal directed the original authority to quantify the interest payable by the appellant for the period of procedural lapse until the abatement entitlement date.

In conclusion, the tribunal set aside the Commissioner's decision, ruling in favor of the appellant's entitlement to abatement for both months of closure. The judgment highlights the importance of adherence to procedural requirements while ensuring that rightful benefits are not denied due to procedural lapses, subject to the liability to pay interest for such lapses.