Customs, Excise and Gold Tribunal - Delhi
Steel Industries Of Hindustan vs Cce on 17 February, 2006
Equivalent citations: 2006(108)ECC621, 2006ECR621(TRI.-DELHI)
ORDER M.V. Ravindran, Member (J)
1. This appeal is directed against the order-in-original dated 27.10.2005 wherein the abatement claims filed by the appellants were rejected.
2. The relevant facts that arise for consideration are the appellants are engaged in the manufacture of hot re-rolled products of non-alloy steel, and working under the Annual Capacity of Production Scheme as envisaged under Section 3A of the Central Excise Act, 1944 read with Rule 96ZP of Central Excise Rules, 1944 and Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997. Under the said Rules the appellants are eligible to claim the abatement if the Re-rolling Mill is closed for a continuous period of not less than 7 days. The appellant vide their letter dated 13.4.99 claimed an abatement for 217 days closure for different period during the year 1998-99 and vide letter dated 17.4.2000 claimed an abatement for 197 days for different period during the year 1999-2000. In the de-novo proceedings the adjudicating authority was directed to decide the abatement claims of the appellant expeditiously in accordance with law. The adjudicating authority after granting the appellant a personal hearing, decided the abatement claims of the appellants for the year 1998-99 & 1999-2000. The adjudicating authority in his order has rejected the abatement claims filed by the appellant for the year 1998-99 and 1999-2000. Hence this appeal.
3. The learned Advocate for the appellants submits that the findings of the adjudicating authority is not factual. It was also contended that the adjudicating authority has blindly applied the provision of Rule 96ZP without examining the bonafide claim for abatement. It was submitted that the appellants have followed the provisions of the Rule 96ZP correctly and whatever errors are noticed are not that very detrimental to the cause of giving abatement claimed by the appellant. He produces copies of all the intimations filed by them of both years, to the authorities.
4. The learned D.R. submits that the appellant should have adhered to the provisions of Rule 96ZP strictly, on a failure to do so, they will not get any abatement from the authorities. It was also contended that, to avail abatement the appellant has to give the proper intimation and follow the procedure which they have not done so. Hence, he submits that the adjudicating authority has correctly denied the abatement claim.
5. Considered the submissions made by both sides and perused the records. The issue before me is limited in a sense that I have to decide whether the rejection of the abatement claim made by the appellant is correct or otherwise. It is not disputed before me that appellants are functioning under the Annual Production Capacity Scheme. It is also not in dispute that the appellant has preferred the abatement claim for the year 1998-99 and 1999-2000.
5.1 Provisions of Rule 96ZP(2) enables a manufacturer to claim abatement from payment of duty based on Annual Capacity, if the manufacturer does not produce the hot re-rolled products of non-alloy products of non-alloy steel during a continuous period of not less than seven days and he follows the procedure as laid down in Rule 96ZP(2). The provisions of Rule 96ZP(2) are as follows:
Rule 96ZP(2) Where a manufacturer does not produce the hot re-rolled products of non-alloy steel during any continuous period of not less than seven days and wishes to claim abatement under Sub-section (3) of Section 3A of the Central Excise Act, 1944, the abatement will be allowed by an order passed by the Commissioner of Central Excise of such amount as may be specified in such order, subject to the fulfillment of the following conditions, namely:
(a) the manufacturer shall inform in writing about the closure to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, with a copy to the Superintendent of Central Excise either prior to the date of closure or on the date of closure;
(b) the manufacturer shall intimate the reading of the electricity meter to the Assistant Commissioner of Central Excise, with a copy of the Superintendent of Central Excise, immediately after the production in his factory is stopped along with the closing balance of stock of the hot re-roiled products of non alloy steel;
(c) the manufacturer, when he starts production again, shall inform in writing about the starting of production to the assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise with a copy to the Superintendent of Central Excise, either prior to the date of starting production or on the date of starting production;
(d) the manufacturer shall on start of production again, along with the closing balance of stock on restarting the factory, intimate the reading of the electricity meter to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, with a copy to the Superintendent of Central Excise;
(e) the manufacturer shall while sending intimation under Clause (c), declare that his factory remained closed for a continuous period starting from ____ hours on ____ (date) to ___ hours on ____ (date) 5.2 It is claimed by the appellant that they have followed the provisions of the above Rule strictly for claiming the abatement for the year 1998-99 and 1999-2000 and submitted before me the copies of the letters for both years. I find that the adjudicating authority while examining the abatement claims of the appellants in his order at Para No. 4.3 come to the following findings:
I have examined the intimations of closure and re-start of production submitted by the party vis-a-vis the conditions laid down in Rule 96ZP(2) and I have observed that in respect of closures mentioned at serial No. 4, 7 and 10 of above table for the year 1998-99, the party had failed to observe condition No. (a) of Rule 96ZP(2) in as much as they failed to submit the required intimation of closure of their factory to the Deputy/assistant Commissioner either prior to the date of closure or on the date of closure. It has further been observed that in respect of closures mentioned at serial No. 1,8, and 10, the party had failed to observe condition No. (b) of Rule 96ZP(2) in as such as in place of giving closing balance of the stock, they have mentioned opening balance of the stock. Similarly in respect of closures mentioned at Serial Nos. 1, 4, 7, 8, 9, 10, 11, 12 and 13 of the table for the years 1998-99, the party had failed to observe condition No. (d) of Rule 96ZP(2) in the intimations of resumption of production in as much as in place of giving closing balance of the stock of the finished product the party had given opening balance. Further in respect of all the closures during 1998-99, the party had failed to observe condition No. (e) of Rule 96ZP(2) except in the case of closure mentioned at Serial No. 13.
It can be seen from the above findings that the adjudicating authority while deciding on the abatement claim of year 1998-99 and 1999-2000 has considered the facts of only the year 1998-99 and came to conclusion that the claims are liable to be rejected. To my mind this approach is not correct, in as much that I find from the documents produced before me that the appellants have given the intimations required under Rule 96ZP(2) for the year 1999-2000. They have adhered to the provisions in to-to and the adjudicating authority has not considered the same in his order in original. To my mind the said order denying the abatement claim for the year 1999-2000 is vitiated as it is not even cursorily referring to the documents of the period 1999-2000. In respect of documents produced by the appellant for the period 1998-99, the adjudicating authority has faulted with only the possible typographical errors in respect of mentioning of opening balance in place of closing balance which may be due to bona-fide mistake. This cannot be a ground for rejecting the legitimate claim of the appellant for abatement. Further, I observe that the adjudicating authority has rejected the abatement claim of appellant for the year 1998-99 for non-adherence to Clause (e) of Rule 96ZP(2) which requires the appellant to give certificate of period of closure. In this connection, if the letters of intimation of closure and restart of production submitted by the appellant to the authorities are read together, the factum of continuous closure of furnace could be prudently derived. This in itself should enough to grant the abatement claim.
6. It will be unjust to deny the substantive benefit of abatement on the ground of non-filing of a formal declaration in the prescribed form under Clause (e). It will also be denial of justice to the appellant, if, due to bonafide error the closing balance is denoted as opening balance, further more it is against all norms to reject the abatement claim for the year 1999-2000, without even referring to the documents produced by the appellant.
7. In view of the above, to my mind, the above order-in-original dated 27.5.2005 is vitiated and is liable to be set aside. The order-in-original dated 27.5.2005 is set aside, and the abatement claim of the appellants for the years 1998-99 and 1999-2000 are allowed which are as follows:
YEAR 1998-99 Sr. No. Closure period No. of days
1. 03.04.1998 to 17.04.1998 21 2. 24.04.1998 to 01.05.1998 8 3. 09.05.1998 to 15.05.1998 7
4. 01.06.1998 to 14.06.1998 14 5. 27.06.1998 to 03.07.1998 7
6. 18.07.1998 to 31.07.1998 14
7. 05.08.1998 to 17.08.1998 13
8. 14.09.1998 to 07.10.1998 24
9. 17.10.1998 to 08.11.1998 23
10. 23.11.1998 to 18.12.1998 26
11. 01.01.1999 to 15.01.1999 15
12. 22.01.1999 to 31.03.1999 33
13. 27.02.1999 to 31.03.1999 33 ___ TOTAL 217 YEAR 1999-2000 1. 09.04.1999 to 16.04.1999 8 2. 29.04.1999 to 17.05.1999 19 3. 29.05.1999 to 20.06.1999 23 4. 17.07.1999 to 01.08.1999 16 5. 12.08.1999 to 07.09.1999 27 6. 25.09.1999 to 14.11.1999 51 7. 30.11.1999 to 08.12.1999 9 8. 05.01.2000 to 19.01.2000 15 9. 05.02.2000 to 18.02.2000 14 10. 17.03.2000 to 31.03.2000 15 ____ TOTAL 197 The appeal is disposed of in above terms.