Factory closure abatement under compounded levy scheme upheld where closure intimation requirements were satisfied.

Abatement of duty under Rule 96ZO(2) was available where the assessee complied with the prescribed closure-intimation conditions. The dispute arose under the compounded levy scheme based on annual capacity of production, but the decisive point was whether the procedural requirements for factory closure and recommencement had been met. The record showed that the relevant communications were received by the Superintendent on the same day and supporting declarations and endorsements were produced. On that basis, the procedural conditions were treated as satisfied and denial of abatement was unjustified; the assessee was entitled to the claimed relief.

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Issues: Whether the assessee was entitled to abatement of duty under Rule 96ZO(2) of the Central Excise Rules, 1944 on account of factory closure, despite the Revenue's objection that the prescribed conditions were not fulfilled.

Analysis: The duty liability was determined under the compounded levy scheme applicable to annual capacity of production under Section 3A of the Central Excise Act, 1944 and Rule 96ZO of the Central Excise Rules, 1944. The dispute turned on whether the assessee had complied with the conditions attached to abatement for periods of closure. The factual record showed that the offices concerned were in the same and that letters intimating closure and recommencement were received by the Superintendent on the same day. Copies of the relevant communications were produced, including declarations and endorsements required by the rule. In these circumstances, the procedural requirement was treated as satisfied and denial of abatement was found to be unjustified.

Conclusion: The assessee had fulfilled the conditions of Rule 96ZO(2) and was entitled to the abatement claimed.

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