2000 (2) TMI 477 - AT - Central Excise

Summary

Issues: Disallowance of abatement in Central Excise duty for a specific period due to delayed notice of closure, disagreement on the closure status of the factory, and dispute over meter readings.

Issue 1: Disallowance of abatement due to delayed notice of closure
The Commissioner of Central Excise disallowed abatement in Central Excise duty for a specific period, citing that the notice of closure should have been given either before or on the date of closure. The appellant's factory was closed on 27-5-1998, but the notice was sent on 28-5-1998. The appellant argued that the closure was due to a strike by factory workers, and the notice was sent promptly after closure. The appellant contended that the rules required notice before or on the date of closure, and thus they should receive abatement from 28-5-1998. The Tribunal agreed that there was a delay in sending the notice but held that the abatement should be granted from the date of notice, i.e., 28-5-1998.

Issue 2: Disagreement on the closure status of the factory
There was a discrepancy regarding the closure status of the factory, as the Commissioner observed differences in meter readings and the sealing of the crucible. The appellant explained that the electric connection was disconnected, and a new meter was installed upon reopening the factory, leading to different readings. The Tribunal noted that the Department had permitted maintenance work on the furnace and machinery, during which the crucible was unsealed by the Inspector. The Tribunal held that the Inspector's failure to reseal the crucible was not the appellant's fault. Additionally, the Tribunal found no conclusive evidence that the meters were the same, as the appellant claimed the original meter was removed by the Electricity Board. Consequently, the Tribunal concluded that the factory was not operational during the disputed period, and thus, abatement was deemed admissible from 28-5-1998 to 12-4-1999.

Conclusion:
The Appellate Tribunal CEGAT, New Delhi, resolved the issues by allowing the abatement of duty from 28-5-1998 to 12-4-1999, despite a delayed notice of closure. The Tribunal determined that the factory was not fully operational during the period in question, considering the discrepancies in meter readings and the unsealed crucible. The judgment favored the appellant, granting abatement based on the date of notice of closure and the lack of evidence supporting the factory's full operation during the disputed timeframe.