Customs, Excise and Gold Tribunal - Delhi
Kalyan Agro Indus. Corpn. vs Commissioner Of C. Ex. on 24 July, 2002
Equivalent citations: 2003(159)ELT725(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. The issue involved in this Appeal, filed by M/s. Kalyan Agro Industries Ltd. is whether rebate of duty of excise is admissible to them in terms of proviso to Sub-section (3) of Section 3A of the Central Excise Act.
2.1 Shri K.K. Anand, learned Advocate, submitted that the Appellants manufacture non-alloy steel ingots/billets chargeable to Central Excise duty under Section 3A of the Central Excise Act; that the Commissioner, under the impugned Order has disallowed the abatement for the following periods holding that the intimations regarding closure were not received/were not given prior to the closure -
(i) From 24-10-1997 to 3-11-1997
(ii) From 31-1-1998 to 10-2-1998
(iii) From 2-3-1998 to 14-3-1998 2.2 The learned Advocate, further, submitted that on 24-10-92, the furnace was closed at 1820 hours on receipt of closure notice from the Punjab State Electricity Board and intimation for closure was sent under their letter dated 24-10-97 on 25-10-97 under Postal Certificate; that the same has been delivered to the authorities on 25-11-97; that they cannot be held responsible for the delay; that moreover in their letter dated 3-11-97, there was a reference of their letter dated 24-10-97 regarding closure; that the finding about non-receipt of letter by the Range Officer is also of no avail for rejecting their abatement claim since there is no finding by the Adjudicating Authority that the Postal Certificate was not genuine. He relied upon the final decision in the case of Shiv Durga Alloys Pvt. Ltd. v. CCE, Chandigarh, Order No. A/233/2002-NB, dated 31-1-2002 [2002 (141) E.L.T. 733 (T)] wherein the Tribunal regarded due intimation on the basis of copies of the postal certificates and allowed an abatement from payment of duty. Reliance has also been placed on the decision in the case of Shiromani Alloys and Castings (P) Ltd. v. CCE, Jaipur Final Order Nos. A/348-350/2002-NB, dated 27-2-2002 [2002 (144) E.L.T. 134 (T)].
2.3 Regarding abatement sought for the period 31-1-98 to 2-2-98, learned Advocate submitted that 30-1-98 was a closed holiday and as such the Appellants could not inform about the closure of the unit even one day prior to the closure; that 31-1-98 and 1-2-98 happened to be Saturday and Sunday and as such the intimation for closure on 31-1-98 could be given only on 2-2-98; that the intimation given on 2-2-1998 should be considered to have been given in time and there is no justification in curtailing the abatement for two days.
2.4 He relied upon the decision in the case of Datt Multinational Ltd. v CCE, Chandigarh - 2002 (144) E.L.T. 566 (T) = 2002 (50) RLT 46 (CEGAT), D.C. Steels (P) Ltd. v. CCE, Chandigarh - 2002 (139) E.L.T. 291 (T) = 2002 (48) RLT 418 (CEGAT) and Addi Alloys Pvt. Ltd. v CCE, Chandigarh - 2001 (134) E.L.T. 751 (T) = 2002 (49) RLT 917 (CEGAT).
2.5 The learned Advocate also mentioned that the Adjudicating Authority has denied the abatement for one day that is, 2nd March, 1998; that since the closure took place on 17:00 hours, intimation to the Range Superintendent was given on the same day whereas in the Divisional Office, it could be given on the next day because by the time their representative reached the Divisional Officer on 2-3-98 it was already closed; that when they have given the intimation to the Range Officer on the same day which is not denied, there is no justification in disallowing the abatement for 2nd March. 1998.
3. Countering the argument Shri S.C. Pushkarna, learned Departmental Representative, submitted that the Appellants had adopted the modus operandi for closing the factory on Friday evening so that the intimation could not be sent to the Range and Divisional Officer in time. He also relied upon the decision in the case of Uppal Steels Alloys Ltd. v. CCE, Meerut - 2000 (120) E.L.T. 452 (T) - 2000 (40) RLT 723 CEGAT wherein it was held that the entire purpose of the scheme of payment of duty on the basis of annual production capacity was to prevent clandestine manufacture and clandestine removal by short recording or by other methods and, therefore, the intimation for closure to the Assistant Commissioner with a copy to the Range Superintendent is not mere technical lapse. They in fact indicated an intention to plug the loop holes, if any, by bringing senior officers in picture. The Tribunal thus held in the said case "sending no intimation to the Assistant/Deputy Commissioner for substantiating their claim of abatement is material and cannot be brushed aside as a mere technical lapse". The abatement claim was therefore rejected as the notice for closure was not sent to the Assistant Commissioner.
4. I have considered the submissions of both the sides. Proviso to Sub-section (3) of Section 3A of the Central Excise Act provides for abatement of the duty if a factory producing notified goods do not produce the notified goods during any continuous period of not less than 7 days. Further, Rule 96ZO(2) provides that the manufacturer shall inform in writing about the closure to the Assistant Commissioner with a copy to the Superintendent either prior to the date of closure or on the date of closure. In the present matter before us the dispute is about the intimation given about the closure to the proper officer in respect of the first period that is from 24-10-97 to 3-11-97. It is the contention of the Department that the intimation was never received by the Superintendent and intimation about the closure was received by the Assistant Commissioner only on 25-11-97. I find the Appellants have claimed to have sent the intimation by post under postal Certificate on 25-10-97. The Appellants except bringing on record photocopies of postal Certificate showing dispatch of letter on 25-10-97 have not brought any evidence on record to show that the letters sent in these Postal Certificates was the letter about the intimation of closure only. Further, they have not brought any evidence on record after checking up from the Postal Authorities as to whether the letters were delivered or not and if delivered, when? The burden is on the Appellants to prove a positive thing, that is, the service of the intimation of closure on Superintendent and the Divisional Office. The Department cannot be burdened with proving a negative thing. The importance of these closure notices has been emphasized by the Tribunal in the case of Uppal Steels Alloys Ltd. (supra). As in this matter, the closure intimation was never received by the Range Superintendent and the Divisional Office received the same much after the closure, it cannot be said that the requirement of Rule 96ZO(2) has been complied with. Accordingly, the appellants are not eligible for the abatement of the Central Excise duty for the said period.
5. In respect of the period from 2-3-98 to 14-3-98, the abatement has been denied only for one day that is 2-3-98 as the intimation was sent to the Assistant Commissioner on 3-3-98 and not on 2-3-98 whereas it was sent under receipt to the Range Superintendent on 2-3-98 itself. It has not been disputed by the Revenue that the intimation about the closure of the unit was received by the Range Superintendent on 2-3-98. In view of this, there is no reason to not to believe the submissions of the Appellants that by the time the representative of the unit reach the Divisional Office, the same was closed being late evening. Accordingly, there is no reason to deny the abatement in respect of 2-3-98.
6. As far the abatement for the period 31-1-98 to 10-2-98 is concerned, I observe that the intimation for the closure of the factory was sent only on 2-2-98 on the ground that 31st January and 1st February, 1998 happened to be Saturday and Sunday respectively. There is no postal holiday on Saturday, that is 31-1-98 and nothing prevented the Appellants from sending the closure intimation by post. Further, it is observed from the impugned Order that the closure on 31-1-98 was not on account of any power cut or any breakage etc. in the machinery but on account of recession. I find substance in the finding of the Adjudicating Authority that the closure of the unit was not sudden but planned one on account of recession in demand and the intimation as required under the law should have been sent on the date the factory was closed or a day prior to the closure. The ratio of the decision in the case of Datt Multinational Pvt. Ltd. is not applicable inasmuch as in the said case the intimation was for commencing the production from Saturday, i.e. Production was restarted on 13-12-97 in the said case, but the letter dated 13-12-97 was received by the Department on 15-12-97 on account of both the 13th and 14th December, 1997 being closed holidays. The facts remained that the Appellants had sent an intimation on the specific date but the same could not be delivered by the Courier as the offices were closed. In the present matter, the Appellants have not sent the intimation at all on the date specified in Rule 96ZO(2). Similarly in the case of DC Steel Pvt. Ltd. the facts are different inasmuch as when the Superintendent verified the stock and the meter reading, it was found to be same as declared in the letter, no such pleading had been made in the present matter. I, therefore, find no reason to interfere with the findings of the learned Commissioner for denying the abatement for the period 31-1-98 and 1-2-98.
7. The Appeal is thus partly allowed.