2002 (1) TMI 430 - AT - Central Excise

Tribunal remands abatement claims due to procedural lapse, stresses importance of continuous closure declaration

The Tribunal set aside the Commissioner's rejection of abatement claims by manufacturers under the Compounded Levy Scheme due to a procedural lapse in ... Production capacity based duty - Ingots of iron - Production capacity based duty - Remand Issues:Claim for abatement of duty under Compounded Levy Scheme - Requirement of declaration under Rule 96ZO(2)(e) - Rejection of abatement claims by Commissioner - Appeal against rejection.Analysis:The appellants, manufacturers of non-alloy ingots of iron and steel, operated under the Compounded Levy Scheme of Rule 96ZO of the Central Excise Rules, 1944. They claimed abatement of duty for periods when their furnace remained closed for not less than 7 days. The Commissioner rejected the abatement claims due to the absence of a necessary declaration under Clause (e) of sub-rule (2) of Rule 96ZO, leading to the present appeal.In a second round of litigation, the Tribunal had previously set aside the Commissioner's decision on the abatement claims due to a violation of natural justice. The Commissioner was directed to reevaluate the matter after allowing the appellants to provide the required information. Subsequently, the Commissioner again rejected the abatement claims, emphasizing the mandatory nature of the declaration under Clause (e) of Rule 96ZO(2). The appellants had given notice of closure and restart of the furnace for each period but did not expressly declare continuous closure in the restart intimation.The appellant's counsel argued that the continuous closure could be inferred from the sequence of closure and restart intimations, and the duty benefit should not be denied for a procedural lapse. However, the JDR contended that the declaration under Clause (e) was mandatory, citing precedent where strict compliance was upheld. The Tribunal noted that while all other requirements were met, the rejection was solely based on the absence of an express declaration of continuous closure in the restart intimation.The Tribunal found that the restart intimations did not contain the required declaration. However, it highlighted that the appellants had submitted certificates later, affirming continuous closure, which were not considered by the Commissioner. As the Commissioner failed to assess the certificates in light of Clause (e) of Rule 96ZO(2), the Tribunal set aside the order and remanded the matter for a fresh decision, emphasizing the need for a thorough examination of the certificates and providing the appellants with a fair opportunity to present their case.