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1985 (10) TMI 233 - AT - Central Excise
Issues: Interpretation of term "remained closed" in Notification No. 283/82-CE for excise duty credit eligibility.
In this case, the issue revolved around the interpretation of the term "remained closed" in Notification No. 283/82-CE for excise duty credit eligibility. The respondents, a manufacturing company, applied for credit under Rule 56AA(2) of the Central Excise Rules, 1944, which allows duty credit on excisable goods. The Assistant Collector considered a partial lay-off as factory closure, denying duty credit based on lack of production during the lay-off period. The respondents argued that the factory was not closed as raw materials were received, departments functioned, and goods were cleared. The Collector of Central Excise (Appeals) held that lack of production due to a staff lockout did not affect eligibility. The Tribunal analyzed the legislative intent behind the notification, emphasizing clearances over production. They noted similar provisions in other notifications and the distinction between lay-off and closure under the Factories Act. The Tribunal upheld the Collector's decision, emphasizing that the factory functioned despite the lay-off, making the term "remained closed" inapplicable. The applicants sought a reference on various questions, including the interpretation of the Tribunal's order. The Tribunal found some questions not referable under Section 35G of the Act, such as questioning the purpose of a notification or using phrases from other statutes for interpretation. They consolidated relevant questions and referred the key issue to the High Court: whether the Tribunal was correct in interpreting "remained closed" in Notification No. 283/82-CE as not applicable when there were clearances during a period of manufacturing activity in the factory. This consolidated question aimed to address the core dispute regarding the eligibility criteria based on the term "remained closed" and its application in the context of factory operations during the incentive period.
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