2004 (10) TMI 196 - AT - Central Excise

Summary

Issues: Duty demand under Compounded Levy Scheme, denial of abatement of duty, interpretation of Section 38A of the Act

Duty demand under Compounded Levy Scheme:
The appeal was filed against an order affirming duty demand under the Compounded Levy Scheme. The appellants, engaged in textile processing, had been discharging duty under the scheme until its withdrawal on 1-3-2001. The appellants requested sealing of one stenter on 7-2-2001, which was sealed on 15-2-2001. The Revenue denied abatement of duty from 15-2-2001 to 28-2-2001, arguing that the 15-day closure was not complete when the scheme was withdrawn. However, the Tribunal noted that the stenter remained closed/sealed from 15-2-2001 to 28-2-2001, exceeding 15 days. Referring to Section 38A of the Act, the Tribunal held that the withdrawal of the scheme did not affect the appellants' right to claim abatement for the stenter closed for over 15 days. Citing a precedent, the Tribunal emphasized that the repeal of provisions does not impact acquired rights, privileges, or liabilities. Consequently, the duty demand against the appellants for the stenter's closure was rejected.

Denial of abatement of duty:
The crux of the issue was the denial of abatement of duty by the Revenue for the period the stenter remained closed from 15-2-2001 to 28-2-2001. The Revenue argued that the closure period did not meet the 15-day threshold when the Compounded Levy Scheme was withdrawn. However, the Tribunal found that the stenter closure exceeded 15 days, entitling the appellants to claim abatement under Section 38A of the Act. By invoking a legal provision safeguarding acquired rights despite rule amendments or repeals, the Tribunal ruled in favor of the appellants, emphasizing that the withdrawal of the scheme did not extinguish their right to abatement for the stenter closure.

Interpretation of Section 38A of the Act:
The Tribunal's analysis revolved around interpreting Section 38A of the Act in the context of the appellants' entitlement to abatement of duty for the stenter closure. Section 38A safeguards rights, privileges, obligations, or liabilities acquired under rules or notifications that are amended, repealed, or rescinded. Relying on this provision, the Tribunal concluded that the withdrawal of the Compounded Levy Scheme did not nullify the appellants' right to claim abatement for the stenter closure exceeding 15 days. Drawing parallels to a previous case, the Tribunal underscored that the repeal of provisions does not impact rights accrued under the repealed rules. This interpretation guided the Tribunal's decision to set aside the order affirming duty demand and allow the appellants' appeal with consequential relief in accordance with the law.