Strict compliance with compounded levy closure conditions governs abatement; incomplete intimation defeats the claim, and penalty needs reconsideration.

Abatement under the compounded levy scheme was available only on strict compliance with Rule 96ZO(2), including timely closure intimation and furnishing of electricity meter readings and closing stock particulars. Where the manufacturer failed to provide the required supporting particulars, abatement was denied for those closure periods; where complete particulars were later received and the closure lasted at least seven days, abatement was allowed from the date complete intimation was received, despite a one-day delay. Because the duty liability had to be recomputed on that basis, the equivalent penalty could not be finally determined and was remitted for reconsideration after recomputation and hearing.

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Issues: (i) Whether abatement from payment of Central Excise duty was available under Rule 96ZO(2) for the various closure periods claimed by the manufacturer. (ii) Whether the equivalent penalty required interference or reconsideration.

Issue (i): Whether abatement from payment of Central Excise duty was available under Rule 96ZO(2) for the various closure periods claimed by the manufacturer.

Analysis: Abatement under the compounded levy scheme was available only on fulfillment of the conditions in Rule 96ZO(2), including timely intimation of closure and furnishing of the electricity meter reading and closing stock of finished goods. Mere mention of stock figures in RT-12 returns was not a substitute for the required intimation when production stopped. For some periods, the manufacturer failed to furnish meter readings and closing stock particulars, so the claim was not admissible. For other periods, the necessary particulars were furnished and only the intimation of closure was delayed by one day, in which case abatement was allowed from the date on which complete intimation was received, provided the closure was for not less than seven days.

Conclusion: Abatement was denied for the periods where the required particulars were not furnished, but was allowed for the periods where complete intimation was received, though belatedly.

Issue (ii): Whether the equivalent penalty required interference or reconsideration.

Analysis: Since the duty liability had to be recomputed in light of the decision on abatement, the quantum of short payment and the consequential penalty could not be finally assessed on the existing computation. The penalty issue therefore required reconsideration after giving the manufacturer a reasonable opportunity of hearing.

Conclusion: The penalty was not finally set aside, but its imposition was directed to be reconsidered after recomputation of duty and hearing the manufacturer.

Final Conclusion: The dispute was resolved by granting abatement for the eligible closure periods, upholding denial for the ineligible periods, and sending the penalty aspect back for reconsideration after recomputation of the duty demand.

Ratio Decidendi: Abatement under Rule 96ZO(2) is conditional upon strict compliance with the prescribed closure intimation and supporting particulars, and late or incomplete compliance defeats the claim for the affected period.

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