Customs, Excise and Gold Tribunal - Delhi
Steel Industries Of Hindustan vs Commissioner Of C. Ex., Meerut-I on 20 February, 2002
Equivalent citations: 2002(142)ELT209(TRI-DEL)
ORDER P.G. Chacko, Member (J)
1. The appellants were engaged in the manufacture of hot re-rolled products of non-alloy steel falling under Chapter 72 of the Schedule to the Central Excise Tariff Act, 1985 and were working under the Compounded Levy Scheme under Rule 96ZP of the Central Excise Rules, 1944 read with Section 3A of the Central Excise Act, 1944 during the material period. Under Sub-rule (2) of Rule 96ZP read with the proviso to sub-section (3) of Section 3A, they were entitled to abatement of duty on a proportionate basis for any continuous period of not less than 7 days of non-production of products, subject to fulfilment of the conditions prescribed in clauses (a) to (e) of the said sub-rule. On 31-3-98, they submitted to the jurisdictional Commissioner an application for abatement of a total amount of duty of Rs. 5,97,914/- for the following periods totalling to 96 days :-
(i) 1-10-97 to 7-10-97 (7 days)
(ii) 17-11-97 to 1-12-97 (15 days)
(iii) 8-12-97 to 23-12-97 (16 days)
(iv) 7-1-98 to 8-2-98 (33 days)
(v) 23-2-98 to 9-3-98 (15 days)
(vi) 17-3-98 to 26-3-98 (10 days) The Commissioner by order dated 12-4-2001 rejected the claim and directed the party to pay the duty if not already paid. Hence the present appeal by the party.
2. Examined the records and heard both sides.
3. The abatement claim for the period 1-10-97 to 7-10-97 (7days) has been rejected on the ground that the declaration of continuous period of closure as required under Clause (e) of Sub-rule 2 of Rule 96ZP was not filed by the appellants. The abatement claim for the remaining periods has been rejected on the same ground and on the further ground that the appellants had, in their letters of intimation of closure and restart of factory, shown opening balance of stock of products instead of closing balance of stock required under Clauses (b) and (d) of Sub-rule 2. Ld. Counsel, Shri Rajesh Chibber, for the appellants, submitted that, for each of the six periods, the appellants had, in their letter of intimation of restart of production, specifically referred to their earlier date of closure, from which it was clear that the factory remained closed continuously from the date of closure to the time of restart. This, according to ld. Counsel, was enough to meet the requirement of a declaration under Clause (e) of Sub-rule 2 of Rule 96ZP. Ld. Counsel contended that the substantive right to abatement of duty under the Rule was not to be denied to the assessee on the minor technical ground of non-filing of a formal declaration under Clause (e). As regards the second ground for rejection of the abatement claim, Id. Counsel submitted that in most of the letters of intimation of closure and restart of production, the appellants, by mere oversight, happened to show the closing balance of stock as opening balance, which, according to Counsel, did not substantially affect the merits of their abatement claim. He, therefore, submitted that the abatement claim for the entire period ought to have been allowed by the adjudicating authority. Ld. JDR, Shri H.C. Verma reiterated the findings of the Commissioner.
4. Examined the submissions.
5. The abatement claim for the period 1-10-97 to 7-10-97 (7days) has been rejected on the ground of non-filing of declaration of continuous period of closure under Clause (e) of Rule 96ZP(2). Under Clause (e), the appellants had to declare, at the time of giving intimation of restart of production to the Asstt. Commissioner, that their factory remained closed for a continuous period from the time and date of closure to the time and date of restart. Admittedly, this declaration was not filed by the appellants. In respect of a claim for a bare period of 7 days, the requirement of mention of the time of closure on the first day (1-10-97) and of the time of restart on the last day (7-10-97) was certainly crucial inasmuch as, in the event of the duration of closure of factory on any or both of the terminal days (1-10-97 & 7-10-97) being less than 24 hours, the continuous period of closure from 1-10-97 to 7-10-97 would be less than the minimum required period of seven days for abatement of duty. In the absence of mention of the time, it was certainly not possible for the Commissioner to make sure that the appellants' factory had remained closed for a continuous period of the full complement of 7 days. It is significant to note that neither in their letter of intimation of closure nor in their letter of intimation of restart of production had the appellants mentioned the relevant time. In such a situation, no fault can be found with the decision of the Commissioner rejecting the abatement claim for the period 1-10-97 to 7-10-97. In respect of the remaining five periods, the abatement claim has been rejected on two grounds. One of these is the same as the aforesaid ground of non-filing of declaration under Clause (e). In this connection, I observe that the periods are in the range of 10 to 33 days vide items (ii) to (vi) in para (1) of this order. In respect of each of these periods, if the letters of intimation of closure and restart of production submitted by the appellants to the Asstt. Commissioner are read together, the factum of continuous closure of furnace from the date of closure could be prudently discerned. However, in the absence of mention of the exact time of closure and the exact time of restart in the letters of intimation of closure and restart, it is not possible to make sure that the factory remained closed for the full 24 hours each on the first and the last dates of each period so that abatement of duty could be allowed for such period. This, however, will not stand in the way of considering the abatement claim for a shorter period after excluding the terminal dates. For instance, against the abatement claim for 17-11-97 to 1-12-97 (15 days), the claim could be allowed to the extent of 13 days for the period 18-11-97 to 30-11-97 after excluding the terminal days. The second ground on which the abatement claim for the aforesaid five periods has been rejected is that, instead of showing the closing balance of stock, the appellants had shown the opening balance of stock of products under clauses (b) and (d) of Rule 96ZP(2). It has been submitted that this happened by mistake. I am of the view that a claim for abatement of duty should not be rejected on the ground of an apparently bona fide mistake of this kind. Further, it will be unjust to deny the substantive benefit of abatement on the ground of non-filing of a formal declaration in the textual form under Clause (e) inasmuch as continuous closure of production is discernible from other evidence on record. However, in such a case, the terminal dates of the period for which abatement of duty is claimed shall be excluded in determining the eligible period for abatement unless the exact time of closure and exact time of restart are disclosed in the letters of intimation submitted by the manufacturer under clauses (b) and (d) of Rule 96ZP(2). On this basis, the present appellants should be granted abatement of duty only for the following periods :-
(i) 18-11-97 to 30-11-97 (13 days) (ii) 9-12-97 to 22-12-97 (14 days) (iii) 8-1-98 to 7-2-98 (31 days) (iv) 24-2-98 to 8-3-98 (13 days) (v) 18-3-98 to 25-3-98 (8 days)
6. In the result, the claim for abatement of duty for the period 1-10-97 to 7-10-97 is rejected and the claim for abatement of duty for the rest of the periods is allowed to the aforesaid extent. The appeal is disposed of.