Abatement of duty for unforeseen factory closure was upheld despite a short delay in intimation.

Abatement of duty under the compounded levy scheme was admissible where factory closure resulted from an unforeseen hydraulic pump breakdown and the unit remained shut for the claimed period. The short delay in intimating closure, sent the next morning to departmental authorities, did not defeat the substantive entitlement because the closure was not pre-planned and prompt notice was given on the next available opportunity. On those facts, the closure-based relief was upheld in favour of the assessee.

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Issues: Whether abatement of duty was admissible when the factory stopped production due to a breakdown and intimation of closure was sent on the next morning.

Analysis: The duty liability arose under the compounded levy scheme, and abatement under the relevant rule depended on the unit remaining closed for the claimed period. The closure was not pre-planned but resulted from a failure of the hydraulic pump in the evening, and intimation was sent the next morning to the departmental authorities. On these facts, the short delay in intimation did not defeat the substantive entitlement to abatement.

Conclusion: Abatement of duty for the period of closure was admissible, and the appeal was allowed in favour of the assessee.

Ratio Decidendi: Where closure of a factory is occasioned by an unforeseen breakdown and intimation is promptly sent on the next working opportunity, a minor delay in communication does not bar abatement of duty under the closure-based scheme.

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