Duty abatement for closed factory upheld where sealed meter room made meter readings impossible, with reopening day excluded.

Abatement of duty was available under section 3A(3) read with Rule 96ZO(2) where factory production remained closed for at least seven days and the assessee had given written intimation of closure. The assessee also produced an Electricity Board certificate showing disconnection of power and sealing of the meter room, so failure to furnish electricity meter readings was not treated as non-compliance when access to the meter was unavailable. On that basis, duty abatement was allowed, though it was not available for the day production recommenced.

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Issues: Whether the assessee was entitled to abatement of duty under section 3A(3) of the Central Excise Act, 1944 read with Rule 96ZO(2) of the Central Excise Rules, 1944 despite not furnishing the electricity meter reading when the meter room had been sealed by the Electricity Board.

Analysis: Section 3A(3) permits proportionate abatement when factory production is stopped for a continuous period of not less than seven days, subject to the conditions prescribed in Rule 96ZO(2). Those conditions require written intimation of closure and recommencement of production along with meter readings and stock balances. The facts showed that the assessee had informed the Department of closure and produced a certificate from the Electricity Board confirming disconnection of power and sealing of the meter room. Once the meter room was sealed, access to the meter was not available to the assessee, so non-furnishing of meter reading could not be treated as non-compliance in the ordinary sense.

Conclusion: The assessee was entitled to abatement of duty, and the Revenue's appeal failed; however, abatement was not available for the date on which production was recommenced.

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