Closure notice timing on a holiday and complete shutdown of one Hot Air Stenter under excise rules

Rule 96ZQ(7) required closure intimation three days before shutdown, and where the last permissible day fell on a holiday, that holiday had to be taken into account; the intimation could not be rejected merely as belated without considering the intervening non-working day. The provision governing complete closure of a Hot Air Stenter applied when one stenter was wholly shut down, and it did not require closure of every stenter in the factory. On the stated facts, the statutory condition was satisfied, and the matter was remitted for reconsideration of the timeliness issue after hearing the assessee.

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Issues: (i) whether the closure intimation under Rule 96ZQ(7) of the Central Excise Rules, 1944 was rendered invalid because the last permissible day fell on a holiday, and (ii) whether abatement could be denied on the ground that the entire factory was not closed when one Hot Air Stenter was completely shut down.

Issue (i): whether the closure intimation under Rule 96ZQ(7) of the Central Excise Rules, 1944 was rendered invalid because the last permissible day fell on a holiday

Analysis: The Rule required closure intimation at least three days prior to closure, but did not address a situation where the last day for giving notice was an intervening holiday. In such a case, the ordinary rule of computation had to be considered, and the holiday could not be ignored merely because the department received the intimation on the next working day. The failure of the parties to raise the holiday plea earlier did not prevent the authority from considering it.

Conclusion: The intimation could not be rejected solely on the basis of delay without examining the effect of the intervening holiday.

Issue (ii): whether abatement could be denied on the ground that the entire factory was not closed when one Hot Air Stenter was completely shut down

Analysis: Clause (a) of Rule 96ZQ(7) applied to complete closure of a Hot Air Stenter and did not require closure of all stenters in the factory. The Commissioner had treated the Rule as though it demanded complete closure of the entire factory, which was a misreading. On the admitted facts, one full stenter had been closed, and therefore the statutory condition for invoking the Rule was satisfied.

Conclusion: The closure satisfied the requirement of complete closure of a Hot Air Stenter, and abatement could not be denied on that ground.

Final Conclusion: The appeal was allowed to the extent that Rule 96ZQ(7) was held applicable, and the matter was sent back for reconsideration of the alleged belated intimation after taking the intervening holiday into account and after affording hearing to the assessee.

Ratio Decidendi: Where a statutory closure-notice period ends on a holiday, the notice requirement must be assessed by taking the holiday into account, and a provision governing complete closure of a Hot Air Stenter is satisfied when one stenter is wholly closed, without requiring closure of every stenter in the factory.

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