2012 (10) TMI 735 - AT - Central Excise

Non-granting of abatement - Compounded Levy Scheme - CLS Assessee pays lesser amount of duty - Due to shut down of factory for certain period Held that - As per the earlier order of Tribunal in this case on same issue, the appellant was required to pay the entire amount and then claim the abatement from the lower authorities which he failed to do so. Agitating the issue before us under the guise of revenue neutrality or any other point, without exercising the right to appeal against our final order, we find that we are unable to go into the merits of the case as on date. We are unable to review our own order, as Statute prohibits us from doing so. Therefore, same order is upheld.

Issues:
1. Denial of abatement claim and confirmation of demand of duty.
2. Interpretation of Rule 96ZQ(7) regarding abatement claims.
3. Imposition of penalty and its legality.

Issue 1: Denial of abatement claim and confirmation of demand of duty.
The appellant, an independent textile processor under the Compounded Levy Scheme, claimed abatement from payment of duty for a period where their stenter was closed. However, the lower authorities rejected the abatement claim and confirmed the demand of duty, citing Rule 96ZQ of Central Excise Rules, 1944, which required the duty to be first deposited for the entire period before seeking a refund. The Commissioner (Appeals) upheld this decision, noting that the appellant did not deposit the required amount, thus making their abatement claim ineligible. The appellant referred to a circular from 1999 and a Tribunal judgment from 2002, but the Tribunal found that the circular was no longer applicable due to a subsequent amendment in Rule 96ZQ(7). The Tribunal also cited previous judgments where abatement claims were allowed only after depositing the duty, in line with the current legal provisions. Therefore, the Tribunal dismissed the appeal against the denial of the abatement claim and the confirmation of duty demand.

Issue 2: Interpretation of Rule 96ZQ(7) regarding abatement claims.
The Tribunal analyzed the provisions of Rule 96ZQ(7) in detail, emphasizing that the appellant must pay the duty for the entire period before claiming abatement, as per the specific conditions outlined in the rule. The Tribunal referred to previous judgments and legal amendments to support its decision that the appellant's failure to deposit the duty amount rendered their abatement claim invalid. Despite the appellant's reliance on older circulars and judgments, the Tribunal held that the current legal framework required strict compliance with depositing the duty before seeking abatement. The Tribunal granted the appellant the liberty to deposit the amount and then claim a refund, allowing the lower authorities to reconsider the abatement claim upon compliance with the legal requirements.

Issue 3: Imposition of penalty and its legality.
Regarding the penalty imposed on the appellant, the Tribunal noted that the issue primarily revolved around the interpretation of Rule 96ZQ(7) and the admissibility of the abatement claim. Since there was no evidence of misstatement, suppression, or malafide intent on the appellant's part, the Tribunal set aside the penalty of Rs.50,000. The Tribunal emphasized that the penalty was not warranted in this case, as it was a matter of legal interpretation rather than intentional wrongdoing. Consequently, the penalty was revoked, and the appeal was disposed of accordingly.

In conclusion, the Tribunal upheld the denial of the abatement claim and the confirmation of duty demand, clarified the legal interpretation of Rule 96ZQ(7) regarding abatement claims, and annulled the penalty imposed on the appellant due to the absence of any deliberate misconduct.

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