Customs, Excise and Gold Tribunal - Delhi
Aar Kay Concast Ltd. vs Commissioner Of C. Ex., Chandigarh on 18 February, 2002
Equivalent citations: 2002(141)ELT643(TRI-DEL)
ORDER P.G. Chacko, Member (J)
1. This appeal is against rejection, by the Commissioner of Central Excise, of abatement claims made by the appellants for the period 2-12-97 to 9-12-97 and 3-2-98 to 10-2-98.
2. Examined the records and heard both sides.
3. The appellants, who were engaged in the manufacture of Steel Ingots and working under the Compounded Levy Scheme of Rule 96ZO of the Central Excise Rules, 1944 read with Section 3A of the Central Excise Act, 1944, had submitted two claims for abatement of duty on the ground that their furnace had remained closed for continuous periods 2-12-97 to 9-12-97 and 3-2-98 to 10-2-98. Both the claims have been rejected by the Commissioner on the ground that the conditions stipulated under clauses (b), (d) & (e) of Rule 96ZO(2) had not been fulfilled by the claimant. The Commissioner held that the said conditions were mandatory and hence required to be satisfied by the assessee for the purpose of claiming abatement of duty under Rule 96ZO(2). The Commissioner took this view by relying on the decision of the Supreme Court in Mihir Textiles Ltd. v. CC, Bombay [1997 (92) E.L.T. 9 (S.C.)] and the decisions of the Tribunal in CCE v. Avis Electronics (P) Ltd. [2000 (117) E.L.T. 571] and Uppal Steels Alloys Ltd. v. CCE, Meerut [2000 (120) E.L.T. 452 (T) = 2000 (40) RLT 723 (CEGAT)]. He has also relied on certain other decisions of the Supreme Court in the context of examining the question whether the conditions laid down under Clauses (b), (d) & (e) were mandatory or not. In the present appeal, the appellants have contended that the requirement of a declaration under Clause (e) in respect of each of the periods of closure of their furnace was satisfied by way of their letters of intimation of closure and restart of production, wherein the exact time of closure and the exact time of restart had been respectively furnished. According to the appellants, the continuity of closure was discernible from the letter of restart read with the letter of closure. As regards the condition laid down under Clauses (b) & (d) of Sub-rule (2) of Rule 96ZO, the appellants have contended that non-mention of closing stock of products in the letter of closure/restart of furnace was not to be treated as a serious lapse where such stock position was furnished to the Commissioner either in the abatement claim itself or by producing relevant extract of RG-I register. The appellants would say that, in respect of period 2-12-97 to 9-12-97, the stock position was clearly shown in the abatement claim itself and the same could have been verified by the departmental officers with reference to statutory Records, and, in respect of the other period, the relevant extract of the statutory record (RG-1) itself was furnished to the Commissioner, which clearly showed the closing stock of Ingots on the dates of closure and restart of furnace.
4. Ld. Advocate Sh. K.K. Anand has reiterated the above contentions and has relied on the following decisions :-
(i) Kirpal Steels (P) Ltd. v. CCE, Chandigarh [2001 (133) E.L.T. 198 (T) = 2001 (44) RLT 867(CEGAT)]
(ii) Addi Alloys Pvt. Ltd. v. CCE, Chandigarh [2001 (134) E.L.T. 751] In the former case, it was held that abatement claim under Rule 96ZO(2) was not to be rejected on the ground of non-intimation of electric meter reading or on the ground that no declaration was filed under clause (e) of the sub-rule. In the latter case, certain delay involved in the filing of letter of intimation of closure by the assessee was found to be beyond control and the same was condoned and the abatement claim was allowed.
5. Ld. SDR, Sh. A.S. Bedi, reiterating the findings of the Commissioner, submits that due compliance with the conditions prescribed under sub-rule 2 of Rule 96ZO was essential in view of the fact that the Compounded Levy Scheme under the rule was brought into force to curb evasion of duty by manufacturers of Steel Ingots etc. Admittedly, in the present case, the stock position of Ingots was not, disclosed in the letters of restart of production, dated 8-12-97 and 10-2-98, submitted by the party. The declaration of continuous closure required under Clause (e) of the Sub-rule was also not furnished. Thus the mandatory conditions laid down under Clauses (b), (d) & (e) of the sub-rule were not fulfilled and hence the assessee was not entitled to abatement of duty.
6. I have examined the submissions. It appears from the record that, in all the letters of closure and restart submitted by the appellants, they had mentioned the exact time of closure/restart along with the relevant dates. The very letter of intimation of restart contained a specific reference to the earlier letter of closure. The aspect of continuity of the period of closure is fairly discernible from these letters read together. Hence, in my view, the non-filing of a formal declaration as prescribed under Clause (e) ought not to have been pressed as a ground for rejection of the abatement claims. As regards non-mention of stock position, I observe that, in the letter dated 2-12-97 (vide page 11 of appeal file) submitted by the appellants, they had mentioned the stock position of product but this letter was apparently not considered by the Commissioner. However, in the letter dated 8-12-97 intimating restart of production, the party did not mention the stock position. The stock positions were, later on, furnished by the party in their abatement claim for the period 2-12-97 to 9-12-97. Apparently, this was not accepted by the Commissioner as due compliance with Clauses (b) & (d) of Sub-rule (2). In respect of the period 3-2-98 to 10-2-98, the appellants did mention the stock position in their letter of intimation of closure but did not do so in their letter of intimation of re start. They also did not state the stock position in their abatement claim, though they produced an extract of RG-I register to the Commissioner sub sequently. I am unable to take these lapses in a light vein, having regard to the fact that the Compounded Levy Scheme itself was a special scheme in troduced for effectively curbing evasion of duty. As regards the condition laid down under Clause (e), I have already found that the purpose of Clause
(e) was served by the evidence on record. In respect of the condition under Clause (d) in relation to the period 2-12-97 to 9-12-97,1 find that the appel lants had given the stock position in their abatement claim and it was possi ble for the department to verify the stock position with reference to RG-I reg ister. It has been held in the cited case of Addi Alloys that a delay involved in the filing of closure intimation was condonable. Following the ratio of this decision, it has to be held in the present case that the delay involved in the mentioning of stock position is liable to be condoned. I, therefore, hold that the requirement of Clause (d) of sub-rule (2) has been fulfilled in pith and substance by the appellants in relation to the period, 2-12-97 to 9-12-97. In respect of the other period, however, there is no disclosure, even in the abatement claim, of the stock position of product. The mandatory condition laid down under Clause (d) was not fulfilled by the appellants in relation to the period, 3-2-98 to 10-2-98. Therefore, I hold that the Commissioner has rightly rejected the abatement claim for this period. The appeal is thus al lowed in part.