2018 (11) TMI 1137 - AT - Central Excise

Valuation - compounded levy scheme - section 3A(3) of Central Excise Act, 1944 - whether the appellant is eligible for abatement during the period when the rolling mill was shutdown / non-functional? - Held that - The Commissioner has permitted to furnish copies of letters dated 1.10.1998 and 1.10.1999 to the appellant. The only strong inference that can be drawn from this letter is that the intimations regarding the closure of the factory was received by the department. Therefore, the rejection of abatement on the ground that appellant did not give intimations cannot sustain. The rejection of abatement is without basis - Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
1. Eligibility for abatement during the period of shutdown/non-functionality of the rolling mill under the Central Excise Act, 1944.

Detailed Analysis:
The judgment by the Appellate Tribunal CESTAT Chennai involved a case where the appellants, engaged in the manufacture of non-alloy steel and hot re-rolled products, opted for the compounded levy scheme for payment of excise duty as per the Central Excise Act, 1944. The appellants had communicated the period of closure of their unit and claimed abatement of duty under sub-section (3) of Section 3A. However, the claim for abatement was rejected by the original authority, leading to an appeal before the Tribunal (paragraph 1).

During the proceedings, the appellant's counsel argued that the rejection of abatement was based on non-compliance with a specific rule of the Central Excise Rules, 1944, regarding intimation of shutdown periods. The counsel highlighted that although the department initially denied receiving the intimation letters, they later permitted copies of these letters upon request by the appellant, indicating that the intimation was indeed submitted. Furthermore, the counsel referenced a Tribunal decision and a High Court ruling supporting eligibility for abatement during shutdown periods (paragraph 2).

The Appellate Tribunal considered the key issue of whether the appellant was entitled to abatement during the shutdown period of the rolling mill. The Commissioner had noted non-compliance with the rule requiring intimation of shutdown periods. However, the Tribunal observed that the department had permitted the appellant to provide copies of the intimation letters, suggesting that the intimation was indeed submitted. Citing a High Court decision and a previous Tribunal order, the Tribunal concluded that the rejection of abatement lacked a valid basis. Therefore, the impugned order rejecting the abatement claim was set aside, and the appeal was allowed (paragraph 5).

In conclusion, the judgment emphasized the importance of compliance with procedural rules regarding abatement claims and highlighted the significance of providing necessary intimation during shutdown periods to avail of such benefits under the Central Excise Act, 1944. The decision also underscored the relevance of legal precedents in determining eligibility for abatement, ultimately leading to the allowance of the appellant's appeal in this case.