Mandatory intimation for excise abatement requires disclosure of closing stock, but stock description format alone cannot defeat relief.

A manufacturer claiming abatement under the capacity-based excise scheme had to strictly comply with the mandatory intimation requirements for stoppage and restart of production, including disclosure of the closing stock of ingots and billets. Abatement was correctly denied for the first period because the stoppage and restart communications omitted the closing stock figures, and reliance on RG-1 records could not cure that defect. Abatement was allowed for the second period because timely intimation was given with the meter reading and stock disclosure, and describing the stock in pieces rather than weight did not defeat the statutory object where the factual stoppage and restart were otherwise verified.

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Issues: (i) Whether the assessee was entitled to abatement for the period 23-8-97 to 18-9-97 despite not furnishing the closing balance of stock in the intimation of stoppage and restart of production. (ii) Whether the assessee could be denied abatement for the period 24-10-97 to 12-11-97 on the ground that the closing stock of ingots was stated in number of pieces and not in weight.

Issue (i): Whether the assessee was entitled to abatement for the period 23-8-97 to 18-9-97 despite not furnishing the closing balance of stock in the intimation of stoppage and restart of production.

Analysis: The scheme under Section 3A of the Central Excise Act, 1944 and Rule 96ZO(2) of the Central Excise Rules, 1944 required the manufacturer, when production stopped and when it restarted, to intimate the electricity meter reading along with the closing balance of stock of ingots and billets. The communication dated 23-8-97 did not disclose the closing stock, and the communication dated 18-9-97 also omitted the closing balance of stock on restarting. Since the assessee sought the benefit of abatement under the rule, compliance with the essential requirements was mandatory. The argument that the department could have obtained the stock figures from RG-1 records was not accepted.

Conclusion: The denial of abatement for the period 23-8-97 to 18-9-97 was upheld and the finding was against the assessee.

Issue (ii): Whether the assessee could be denied abatement for the period 24-10-97 to 12-11-97 on the ground that the closing stock of ingots was stated in number of pieces and not in weight.

Analysis: For this period, the assessee had furnished timely intimation of stoppage and restart, together with the meter reading and closing balance of stock. The objection that the stock was stated only in pieces and not in weight was rejected because the abatement under Section 3A of the Central Excise Act, 1944 is linked to production capacity and the stock disclosure under Rule 96ZO(2) serves only to verify the factual stoppage and restart of production. The manner in which the closing stock was described did not justify denial of the benefit.

Conclusion: The assessee was entitled to abatement for the period 24-10-97 to 12-11-97 and the finding was in favour of the assessee.

Final Conclusion: The appeal succeeded only to the extent of the second period of claim, while the first period of abatement remained disallowed.

Ratio Decidendi: A manufacturer claiming abatement under the capacity-based excise scheme must strictly comply with the mandatory intimation requirements regarding stoppage and restart of production, including disclosure of closing stock, but a truthful stock disclosure will not be defeated by the form in which the stock is described where the statutory object is otherwise satisfied.

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