1995 (4) TMI 181 - AT - Central Excise

Summary

Issues: Interpretation of term "closed" in the context of incentive rebate for goods manufactured during a specific period.

In this case, the main issue revolves around the interpretation of the term "closed" in relation to the incentive rebate for goods manufactured and cleared during a particular period specified in a notification. The dispute arises from a lockout period during which the factory was deemed closed for more than 15 days, impacting the eligibility for the incentive production credit under the notification. The crux of the matter lies in determining whether the factory can be considered closed during the lockout period for the purpose of claiming the incentive rebate.

The respondents argued that the lockout period, during which the factory was closed for more than 15 days, should be considered as closure for the incentive production credit. However, the Collector (Appeals) relied on a previous decision that observed activities of production during the lockout period, indicating that the factory was not entirely closed. The Revenue appealed this decision, emphasizing that the factory should be deemed closed during the lockout period, as per the notification's provisions.

The appellant contended that previous decisions cited by the respondents were under reference to higher courts and suggested that an independent view should be taken. The appellant highlighted the distinction between closure as defined in the Industrial Dispute Act and the temporary closure specified in the notification. The argument focused on the impact of strikes or lockouts on normal production and clearance, urging a broader interpretation of the term "closed" in the context of the notification's objective.

After considering the arguments from both sides, the Tribunal examined previous decisions and the definition of "closed" in the notification. The Tribunal noted that production and clearances were observed during the lockout period, indicating that the factory was not entirely closed. Additionally, a judgment from the Supreme Court emphasized that a lockout does not necessarily imply the closure of industrial activities. The Tribunal concluded that any ambiguity in the notification should benefit the citizen, and in this case, the Collector (Appeals)' order was upheld, rejecting the Revenue's appeal for the incentive rebate.

In summary, the judgment delves into the nuanced interpretation of the term "closed" in the context of a lockout period affecting the eligibility for an incentive rebate. The Tribunal's decision underscores the importance of considering production activities during such periods and the broader implications of closure in industrial disputes.